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The  Status  of 
Americans  in  Mexico 


'^'  3HJ.  JO 


BULLETINS 

OF  THE 

AMERICAN  ASSOCIATION  OF  MEXICO 


1921 


Digitized  by  the  Internet  Archive 

in  2008  with  funding  from 

IVIic'rosoft  Corporation 


http://www.archive.org/details/bulletinsmexicoOOamerrich 


TTPON  request  by  letter,  this  Association  will  forward 
copies  of  its  collected  bulletins  to  persons  interested 
in  Mexican  affairs.  Members  and  others  who  receive 
this  pamphlet  are  advised  that,  if  they  wish  copies  sent 
to  friends,  they  should  furnish  names  and  addresses  with- 
out delay  as  the  edition  is  limited.  Applications  should 
state    whether    the    English    or    Spanish    text    is    desired. 


1 

i 


The  Status  of 
Americans  in  Mexico 


BULLETINS 

OF  THE 

AMERICAN  ASSOCIATION  OF  MEXICO 

1921 


PUBLISHED  BY 

The  American  Association  of  Mexico 
112  Park  Avenue,  New  York 


FOREWORD 

FROM  its  inception,  the  American  Association  of 
Mexico  has  directed  its  activities  toward  securing 
justice  for  Americans  in  Mexico.  It  has  labored  to 
secure  protection  for  the  legally  acquired  rights  of  our 
nationals  resident  in  that  country.  It  has  stood,  and  it 
stands,  upon  the  principles  contained  in  the  program  enun- 
ciated by  Secretary  of  State  Hughes,  convinced  that  friendly 
relations  established  upon  such  terms  will  possess  the 
essential  quality  of  permanence.  It  believes  that  temporary 
adjustments  would  prove  harmful  to  both  peoples,  that 
fundamental  questions  at  issue  must  be  settled  before 
these  two  neighbors  can  live  together  in  harmony  upon  a 
basis  of  goodwill  and  real  reciprocity. 

First  of  any  of  the  organized  bodies  which  have  to  do 
with  the  protection  of  American  interests  in  Mexico,  the 
American  Association  of  Mexico  made  public  announcement 
that  it  was  opposed  to  the  recognition  of  any  Mexican  gov- 
ernment until  just  and  fair  treatment  and  proper  legal 
status  were  assured  for  such  interests.  Previous  to  the 
announcement  of  the  Hughes  policy,  on  January  31,  1921, 
this  Association  published  its  program,  embodying  this 
principle.  It  was  actuated  by  a  desire  to  see  justice  done; 
in  no  sense  was  this  organization  moved  by  a  spirit  of 
hostility  to  Mexico  and  things  Mexican. 

This  Association  has  the  most  friendly  interest  in  the 
Mexican  people;  it  is  the  enemy  of  no  individual  Mexican 
administration;  it  does  not  advocate  armed  intervention  in 
Mexico,  nor  has  it  done  so  in  the  past.  As  an  American 
organization  the  field  of  this  Association  is  restricted ;  it 
must  confine  its  work  to  those  things  which  touch  Amer- 
icans and  their  legally  acquired  interests.  It  takes  pride 
in  the  fact,  however,  that  the  organization  and  its  directors 
have  advocated  no  program  and  no  set  of  principles  which 
would  not  benefit  Mexicans  fully  as  much  as  Americans  and 
other  foreigners. 

The  suspension  of  negotiations  between  Mexico  and  the 
United  States  with  respect  to  recognition,  due  to  the  definite 
and  final  refusal  of  Mexico  to  comply  with  the  conditions 

M   T675 


of  the  American  government  is  regarded  as  a  propitious 
time  to  comply  with  the  requests  of  many  Mexicans,  as  well 
as  Americans  interested  in  Mexico,  for  a  complete  collec- 
tion of  our  bulletins  in  convenient  form.  A  decision  was 
reached  to  issue  this  pamphlet  in  both  an  English  and  a 
Spanish  edition.  To  the  collection  of  eight  bulletins  has 
been  added  a  hitherto  unpublished  paper  on  certain  phases 
of  the  Mexican  question,  the  essential  features  of  which 
were  placed  before  Secretary  of  State  Hughes  in  the  form 
of  a  memorandum.  In  fact,  this  collection  of  documents 
comprises  the  case  of  Americans  in  Mexico  as  presented  to 
our  State  Department  by  the  American  Association  of 
Mexico.  The  reader  will  find  in  this  pamphlet  a  faithful 
presentation  of  our  policies  and  purposes  in  the  past ;  these 
remain,  without  change,  the  principles  and  policies  of  this 
Association  today. 

THE  AMERICAN  ASSOCIATION  OF  MEXICO. 
January,  1922. 


PROGRAM  ADOPTED  BY  THE  AMERICAN 
ASSOCIATION  OF  MEXICO 

(Issued  January  31,  1921) 

That  no  government  in  Mexico  be  accorded  recognition 
by  the  American  Government  until  it  has  agreed  to  the 
following  conditions: 

1.  The  return  to  their  owners  of  all  properties  of  Ameri- 
can citizens  confiscated  or  administered  by  the  Mexican 
government. 

2.  An  acknowledgment  of  the  duty  of  the  Mexican  gov- 
ernment to  reimburse  American  citizens  for  damages  suf- 
fered during  the  series  of  revolutions  beginning  in  1910, 
and  the  appointment  of  a  joint  commission  to  determine 
such  damages. 

3.  The  elimination  of  all  provisions  of  the  Constitution 
of  1917  that  have  as  their  effect  the  confiscation  of  prop- 
erty of  American  citizens.  This  includes  the  articles  that 
provide  for  the  nationalization  of  the  oil-bearing  subsoil  of 
private  property,  and  other  stipulations  furnishing  a  basis 
for  the  confiscation  of  American  holdings. 

4.  The  elimination  of  those  provisions  of  the  Constitu- 
tion of  1917  that  impose  restrictions  on  the  development 
of  American  enterprise  in  Mexico,  or  an  agreement  not  to 
apply  them  to  American  citizens.  Among  these  are  the  re- 
strictions with  regard  to  the  purchase  of  rural  and  city  real 
estate,  and  those  forbidding  the  acquisition  of  mining  and 
oil  properties  by  American  citizens. 

5.  The  elimination  of  the  humiliating  provision  of  the 
Constitution  of  1917  that  requires  that  an  American  citizen 
shall  waive  the  benefits  of  his  nationality  in  acquiring  prop- 
erty of  any  kind. 

6.  The  elimination  of  the  provision  of  the  Constitution 
of  1917  that  forbids  an  American  clergyman  of  any  denomi- 
nation to  exercise  his  sacred  office  in  Mexico. 

7.  The  elimination  of  the  provision  of  the  Constitution 
of  1917  that  authorizes  the  federal  executive  to  expel  an 
American  citizen  from  the  country  without  cause  and  with- 
out trial. 

8.  The  removal  of  all  other  governmental  restrictions 
on  legitimate  American  enterprise. 


LEGAL  STATUS  OF  AMERICAN  CITIZENS  IN 
MEXICO  UNDER  THE  CARRANZA  CON- 
STITUTION OF  1917 

(BULLETIX  Xo.  1  — Issued  April  20,  1921) 

1.  An  American  citizen  may  be  deprived  under  a  num- 
ber of  pretexts,  by  executive  decree,  of  land  already  acquired 
in  Mexico. 

2.  An  American  citizen  is  deprived  of  the  right  here- 
tofore enjoyed  of  acquiring  land.  He  must  now,  in  each 
case,  ask  permission  from  the  president  or  governor,  depend- 
ing on  the  location  of  the  land ;  the  executive  may  arbitrarily 
grant  or  deny  permission.  He  must  also  file  with  the  Mex- 
ican Department  of  Foreign  Affairs  a  waiver  of  his  citi- 
zenship with  respect  to  such  land,  that  is,  he  must  renounce 
his  right  to  appeal  to  his  government  for  protection,  under 
penalty  of  forfeiture  of  his  property  if  he  should  violate 
this  undertaking. 

3.  In  the  case  of  non-urban  land,  if  an  American  citi- 
zen should  succeed  in  securing  a  permit,  his  right  to  pur- 
chase and  retain  the  property  will  still  be  subject  to  a 
program  of  socialistic  legislation  in  the  several  states  which 
attaches  to  titles  such  insecurity  as  to  affect  materially  the 
value  of  his  holdings. 

4.  Whether  urban  or  non-urban,  under  no  conditions 
may  an  American  citizen  acquire  real  property  within  sixty 
miles  of  the  land  frontiers  of  Mexico  and  within  thirty  miles 
of  either  coast.  These  zones  comprise  about  forty  per  cent, 
of  the  area  of  the  Mexican  republic,  and  inc'ude  some  of 
the  most  desirable  land  in  Mexico  and  the  land  which 
American  citizens  would  most  naturally  wish  to  purchase. 
The  effect  of  this  prohibition,  for  example,  is  to  prevent  an 
American  from  purchasing  real  estate  in  the  Tampico  oil 
field  and  in  the  other  prospective  fields  along  the  entire 
coast  of  the  Gulf  of  Mexico. 

5.  In  the  prohibited  zones  just  mentioned,  American 
citizens  will  not  even  be  permitted  to  retain  real  estate 
which  they  acquired  prior  to  1917.    There  is  pending  before 


the  Mexican  Congress  a  bill  presented  by  Carranza  which 
provides  for  the  virtual  confiscation  thereof. 

6.  An  American  corporation  may  no  longer  acquire 
title  to  real  property  in  Mexico. 

7.  American  citizens  may  no  longer  acquire  title  to 
agricultural  land  through  a  Mexican  corporation ;  it  is  gen- 
erally believed  that,  by  implication,  grazing  lands  are  also 
included  in  this  prohibition.  This  provision,  and  the  one 
mentioned  in  Paragraph  3,  effectively  put  an  end  to  colon- 
ization and  the  purchase  by  Americans  of  small  farms  in 
Mexico,  and  such  was  the  design  of  the  framers  of  the 
Constitution. 

8.  To  acquire  title  to  oil  or  mineral  rights,  an  Amer- 
ican citizen  must  likewise  waive  his  citizenship  as  defined 
in  Paragraph  2. 

9.  To  acquire  title  to  stock  or  bonds  in  a  Mexican 
corporation,  an  American  must  likewise  waive  his  nationality 
and  his  privilege  of  diplomatic  protection. 

10.  The  Carranza  Constitution  provides  for  the  confisca- 
tion of  the  oil-bearing  subsoil  of  properties  owned  or  leased 
by  American  citizens  in  accordance  with  previous  Mexican 
law.  This  affects  thousands  of  Americans  of  small  means 
who  own  land  in  fee  throughout  the  Republic  acquired  be- 
fore this  Constitution  went  into  effect. 

11.  An  American  clergyman  may  no  longer,  under  any 
circumstances,  exercise  his  office  in  Mexico;  he  may  not  do 
so  even  by  becoming  a  Mexican  citizen. 

12.  An  American  citizen  may  be  expelled  from  Mexico 
by  arbitrary  order  of  the  President,  without  right  of  trial 
by  the  Mexican  courts  or  of  appeal  to  his  own  government. 


PROTECTION  FOR  AMERICAN  CITIZENS 
ABROAD 

If  We  Are  to  Extend  Foreign  Trade,  the  Rights  of  Our 

Nationals  Residing  In  Other  Countries 

Must  Be  Assured 

(BULLETIN  No.  2— Issued  May  15,  1921) 

The  American  Association  of  Mexico  has  taken  a  firm 
stand  on  the  platform  that  neither  the  present  Mexican 
government  nor  any  Mexican  government  should  be  accorded 
recognition  by  the  American  government  until  an  agree- 
ment is  made  in  which  the  Mexican  government  shall  give 
pledges  to  restore  to  American  citizens  the  rights  of  which 
they  have  been  deprived  through  an  illegal  constitution  en- 
acted by  the  military  faction  of  which  Carranza  was  the 
head.  This  Association  was  led  to  this  conclusion  not  only 
because  of  the  strict  justice  of  such  a  demand,  but  because 
it  is  of  fundamental  importance  in  the  development  of  our 
foreign  trade  that  the  rights  of  Americans  resident  in  for- 
eign countries  be  fully  respected  in  accordance  with  the 
guarantees  of  international  law  and  the  precedents  estab- 
lished by  common  acceptance  among  civilized  nations  in 
their  relations  with  one  another. 

It  has  been  the  too  common  practice  during  recent  years 
to  group  all  Americans  resident  in  other  lands  under  the 
title  of  "expatriates"  with  all  the  contemptuous  implication 
which  the  word  carries  with  it  in  every  day  usage.  We  are 
firm  in  our  conviction,  however,  that  our  nationals  resident 
in  new  and  undeveloped  countries  are  entitled  with  very  few 
exceptions  to  the  highest  praise  as  business  pioneers  doing 
a  work  vital  to  the  future  welfare  of  the  United  States. 
The  American  business  man  living  in  ^exico  must  possess 
the  sterling  virtues  and  high  courage  of  the  pioneer  if  he 
is  to  weather  the  storm  of  revolution  and  hostile  laws  which 
has  beat  about  him.  It  is  a  disgrace  to  this  country  that  he 
should  have  been  permitted  to  play  a  lone  hand. 

We  are  pleased  to  reproduce,  therefore,  the  statesman- 
like exposition  of  basic  principles  by  Senator  Henry  Cabot 
Lodge,  Chairman  of  the  Senate  Committee  of  Foreign  Re- 

8 


lations,  in  a  speech  on  the  Colombian  treaty  delivered  in  the 
Senate  on  April  12th,  1921.    Senator  Lodge  said: 

"We  must  stand  behind  our  own  people  wherever 
they  may  be  in  the  world,  whether  in  business  or  merely 
as  travelers.  In  this  direction,  the  United  States  has 
been  careless  and  indifferent  and  in  some  instances, 
notably  in  Mexico,  much  worse  than  careless.  If  we 
are  to  extend  our  foreign  trade  in  South  America  and 
the  East,  Americans  who  invest  their  money  in  those 
countries  and  who  live  according  to  the  laws  of  the 
foreign  country  in  which  they  are  placed,  must  always 
be  sure  that  they  have  behind  them  their  own  govern- 
ment and  that  they  will  receive  the  protection  to  which 
they  are  entitled.  Our  Government  in  the  past  has  in 
certain  cases  actually  gone  to  the  point  of  taking  the 
position  that  an  American  citizen  or  an  American  cor- 
poration making  investments  in  another  country  was 
not  entitled  to  any  protection,  that  they  were  to  be 
frowned  upon  instead  of  encouraged.  I  regard  this  as 
an  absolutely  false  policy,  and  if  we  persist  in  it  we 
shall  not  only  make  the  expansion  of  our  commerce  im- 
possible, but  we  shall  find  ourselves  very  much  weak- 
ened in  securing  those  articles  necessary  to  our  busi- 
ness life  and  to  the  life  of  our  people,  like  oil,  rubber, 
and  other  great  raw  materials  of  equal  importance.  If 
American  capital  is  willing  and  ready,  with  the  assur- 
ance that  its  rights  are  to  be  protected  in  foreign 
countries,  to  invest  in  those  countries  and  thereby  de- 
velop and  enlarge  our  trade,  it  should  be  encouraged 
and  praised,  not  berated  and  attacked." 
Such  eminent  Americans  as  President  Warren  G.  Harding, 
Secretary  of  State  Charles  E.  Hughes  and  Secretary  of  In- 
terior Albert  B.  Fall,  have  given  public  expression  to 
opinions  entirely  in  harmony  with  the  views  set  forth  by 
Senator  Lodge  and  with  particular  application  to  our  rela- 
tions with  Mexico. 

In  his  speech  as  Chairman  of  the  Republican  National 
Convention  in  Chicago,  June,  1916,  Mr.  Harding  said: 

"Whatever  the  ultimate  solution  may  be,  history  will 
write  Mexico  as  the  title  to  the  humiliating  recital  of 
the  greatest  fiasco  in  our  foreign  relations.  Uncer- 
tainty, instability,  Mexican  contempt  and  waning  self- 


respect  will  be  recorded  in  every  chapter,  and  the  piti- 
able story  of  sacrificed  American  lives  and  the  destruc- 
tion of  lawfully-held  American  property  will  emphasize 
the  mistaken  policy  of  watchful  waiting  and  wobbling 
warfare. 

"When  the  spirit  of  American  accomplishment,  or 
the  mercies  of  American  ministration,  or  the  inclina- 
tions of  American  teaching,  or  the  adventures  of  Amer- 
ican development  take  our  people  abroad,  under  the 
compacts  of  civilization,  they  have  a  right  to  believe 
that  every  guaranty  of  American  citizenship  goes  with 
them.  When  it  does  not  we  have  forfeited  the  Ameri- 
can inheritance." 
At  Marion,  Ohio,  July  22,  1920,  in  his  speech  accepting 

the  Republican  nomination  for  the  Presidency,  Mr.  Harding 

referred  to  the  Mexican  situation  as  follows: 

"I  believe  there  is  an  easy  and  open  path  to  righteous 
relationship  with  Mexico.  It  has  seemed  to  me  that  our 
undeveloped,  uncertain  and  infirm  policy  has  made  us  a 
party  to  the  governmental  misfortunes  in  that  land. 
Our  relations  ought  to  be  both  friendly  and  sympa- 
thetic; we  would  like  to  acclaim  a  stable  government 
there  and  offer  a  neighborly  hand  in  pointing  the  way 
to  greater  progress.  It  will  be  simple  to  have  a  plain 
and  neighborly  understanding  about  respecting  our 
border,  about  protecting  the  lives  and  possessions  of 
American  citizens  lawfully  within  the  Mexican  do- 
minions. There  must  be  that  understanding  else  there 
can  be  no  recognition,  and  then  the  understanding  must 
be  faithfully  kept." 
Mr.  Hughes,  in  replying  to  the  committee  which  notified ' 

him  of  his  nomination  as  the  Republican  candidate  for  the 

Presidency  in  1916,  said: 

"We  demand  from  Mexico  the  protection  of  the  lives 
and  property  of  our  citizens  and  the  security  of  our 
border  from  depredations.  Much  will  be  gained  if 
Mexico  is  convinced  that  we  contemplate  no  meddle- 
some interference  with  what  does  not  concern  us,  but 
that  we  propose  to  insist  in  a  firm  and  candid  manner 
upon  the  performance  of  international  obligations.  To 
a  stable  government,  appropriately  discharging  its  in- 
ternational duties,  we  would  give  ungrudging  support." 

10 


Addressing  the  National  Association  for  the  Protection  of 
American  Rights  in  Mexico,  in  a  letter  dated  January  19, 
1921,  Senator  Fall  outlined  his  views  on  Mexico,  insisting 
that  Americans  damaged  by  Mexican  revolutions  should  re- 
ceive proper  reparation  and  that  Americans  should  not  be 
deprived  of  their  rights  by  the  Carranza  Constitution  of 
1917.  Referring  to  a  written  agreement  or  protocol  as  a 
prerequisite  for  recognition  of  Mexicb  by  the  United  States, 
Senator  Fall  said : 

"So  long  as  I  have  anything  to  do  with  the  Mexican 
question,  no  government  in  Mexico  will  be  recognized, 
with  my  consent,  which  government  does  not  first  enter 
into  a  written  agreement  practically  along  the  lines 
suggested." 

Both  the  great  political  parties  in  the  United  States  in 
their  national  platforms  insist  that  Mexico  give  guarantees 
of  intent  to  protect  American  rights  before  recognition  is 
accorded  Mexico  by  the  American  government.  The  Mexi- 
can plank  of  the  platform  of  the  Republican  National  Con- 
vention of  1920  says  in  part: 

"We  should  not  recognize  any  Mexican  government, 
unless  it  be  a  responsible  government  willing  and  able 
to  give  sufficient  guarantees  that  the  lives  and  property 
of  American  citizens  are  respected  and  protected,  that 
wrongs  will  be  promptly  corrected,  and  just  compensa- 
tion will  be  made  for  injuries  sustained.  The  Republi- 
can party  pledges  itself  to  a  consistent,  firm  and  effec- 
tive policy  towards  Mexico  that  shall  enforce  respect 
for  the  American  flag  and  that  shall  protect  the  rights 
of  American  citizens,  lawfully  in  Mexico,  to  security  of 
life  and  enjoyment  of  property  in  accordance  with  es- 
tablished principles  of  international  law  and  our  treaty 
rights." 
The  Democratic  National  Platform  adopted  at  San  Fran- 
cisco in  July,  1920,  has  this  to  say  of  the  Mexican  question : 

"When  the  new  government  of  Mexico  shall  have 
given  ample  proof  of  its  ability  permanently  to  main- 
tain law  and  order,  signified  its  willingness  to  meet  its 
international  obligations  and  written  upon  its  statute 
books  just  laws  under  which  foreign  investors  shall 
have  rights  as  well  as  duties,  the  government  should 

11 


receive  our  recognition   and   sympathetic  assistance. 
Until  these  proper  expectations  have  been  met,  Mexico 
must  realize  the  propriety  of  a  policy  that  asserts  the 
right  of  the  United  States  to  demand  full  protection  for 
its  citizens." 
The  recognition  or  non-recognition  of  the  Mexican  govern- 
ment is  a  great  national  question.    It  is  in  no  sense  a  partisan 
issue.     This  is  clearly  shown  by  the  quotations  from  the 
platforms  of  the  two  dominating  political  parties  in  this 
country.    Furthermore,  the  recent  Democratic  administra- 
tion placed  our  Government  on  record  when  Secretary  of 
State  Robert  Lansing  protested  formally  to  the  Carranza 
government  against  the  confiscatory  and  anti-foreign  clauses 
of  the  Constitution  of  1917.    This  protest  was  entered  be- 
fore the  constituent  convention  at  Queretaro  had  adopted 
the  final  draft  of  the  Constitution.     The  convention  con- 
temptuously ignored  the  American  protest.    This  protest 
has  never  been  withdrawn. 

The  provisions  against  which  objection  was  made  outrage 
justice  and  act  in  definite  restraint  of  our  foreign  trade. 
Moreover,  as  already  pointed  out  by  Senator  Lodge,  they 
tend  to  weaken  us  in  securing  "those  articles  necessary  to 
our  business  life  and  to  the  life  of  our  people,  like  oil,  rubber 
and  other  great  raw  materials  of  equal  importance."  In 
other  words,  respect  for  our  rights  in  Mexico  affects  the 
welfare  and  interests  of  every  American  citizen  even  though 
he  has  not  a  cent  invested  in  Mexico  and  never  expects  to 
have. 

We  feel  that  the  quotations  from  opinions  of  the  leaders 
in  the  present  administration  will  serve  to  reassure  those 
interested  in  a  just  and  proper  solution  of  our  problems 
with  Mexico  that  American  rights  in  that  country  will  be 
fully  protected.  They  show  that  the  foremost  men  of  the 
government  are  fully  and  correctly  informed  with  regard  to 
the  real  issues  in  Mexico. 

The  opinions  quoted  give  hope  that  the  American  foreign 
policy  in  general,  and  particularly  with  respect  to  Mexico, 
is  soon  to  be  turned  right  side  up  again;  that  instead  of 
attempting  to  dictate  to  Mexico  and  say  to  her  that  she  shall 
or  shall  not  have  a  certain  man  for  president,  we  shall  get 
back  to  the  sane  and  proper  policy  of  demanding  from 
Mexico,  as  from  any  other  country,  just  treatment  for 

12 


American  citizens  in  Mexico  and  adequate  protection  for 
their  lives  and  property. 

Just  how  Mexico  shall  reinstate  Americans  in  their  rights, 
provided  it  is  done  effectively,  under  what  form  of  govern- 
ment Mexico  shall  be  ruled,  or  by  whom  that  government 
shall  be  administered,  are  internal  matters  for  Mexicans 
alone  to  decide. 

We  believe,  however,  that  to  demand  protection  of  our 
nationals  in  Mexico  is  the  right  and  duty  of  the  American 
government. 


13 


ESSENTIALS  OF  A  JUST  POLICY  TOWARDS 

MEXICO 

Memorandum  Presented  to  the  Honorable  the  Secretary  of 

State  of  the  United  States  on  the  11th  Day  of  April, 

1921,  by  the  American  Association  of  Mexico  in 

Which  It  Submits  Its  Views  With  Respect  to 

the  Mexican  Situation 

(BULLETIN  No.  3— Issued  June  20,  1921) 

The  American  Association  of  Mexico  desires  to  present  its 
views  on  the  Mexican  situation  for  the  consideration  of  the 
American  Government  in  the  formulation  of  its  Mexican 
policy.  The  importance  of  our  Mexican  relations  and  the 
underlying  facts  are  so  well  known  to  the  Secretary  of  State 
that  discussion  of  them  here  would  be  superfluous. 

In  the  formulation  of  a  Mexican  policy  it  is  apparent  that 
three  fundamental  considerations  present  themselves. 

First,  the  status  of  American  citizens  in  Mexico  and  the 
attitude  of  the  American  Government  toward  those  citizens. 

Second,  the  effect  of  the  American  policy  on  other  for- 
eigners in  Mexico  and  on  the  relations  of  other  countries 
with  the  Mexican  government. 

Third,  the  effect  of  the  American  policy  on  the  Mexican 
people. 

In  our  opinion,  the  prime  duty  of  the  American  Govern- 
ment is  to  its  own  citizens,  and  requires  insistence  upon  the 
following  points: 

First,  just  reparation  for  the  lives  of  Americans  killed 
and  for  property  damaged  in  the  series  of  Mexican  revolu- 
tions. 

Second,  restoration  to  American  citizens  of  the  rights 
they  enjoyed  prior  to  the  enactment  of  the  Carranza  Con- 
stitution of  1917. 

Third,  guarantees  for  the  protection  of  American  citizens 
and  their  property  in  the  future. 

The  fortunes  of  Mexicans,  Europeans  and  Americans  in 
Mexico  are  so  linked  together  that  justice  to  any  one  class 
will  bring  tranquility  and  happiness  to  all.  Our  obligations 
to  foreign  governments  arising  from  our  traditional  policy 
on  this  continent,  and  humanitarian  considerations  for  the 
welfare  of  the  Mexican  people,  will  be  cared  for  automatically 

14 


as  a  natural  result  of  safeguarding  the  lives  and  property  of 
American  citizens  by  a  firm  and  just  attitude  on  the  part  of 
our  Government. 

Two  questions  at  once  present  themselves  to  our  mind  in 
considering  the  Mexican  policy  of  our  Government.  First, 
will  the  American  Government  acquiesce  in  the  continued 
refusal  of  the  Mexican  government  to  do  justice  to  American 
citizens?  And,  second,  if  the  American  Government  does 
not  acquiesce  in  such  treatment,  what  course  will  it  pursue 
to  remedy  this  situation?  On  the  assumption  that  the  gen- 
eral expressions  from  the  present  administration  indicate  a 
return  to  the  policy  of  protection  for  American  interests 
abroad,  which,  naturally,  must  include  Mexico,  we  beg  to 
submit  a  few  suggestions  for  the  consideration  of  our  Gov- 
ernment in  formulating  a  policy  for  the  effective  protection 
of  American  citizens  in  Mexico. 

The  American  Association  of  Mexico  is  of  the  opinion  that 
neither  the  present  Mexican  government  nor  any  Mexican 
government  should  be  accorded  recognition  by  the  American 
Government  until  an  agreement  is  made  in  which  the  Mexi- 
can government  shall  undertake  to  compensate  Americans 
who  have  suffered  in  the  series  of  revolutions  which  have 
afflicted  that  country  since  1910,  and  shall  give  pledges  to 
restore  to  American  citizens  the  rights  of  which  they  have 
been  deprived  through  an  illegal  constitution  enacted  by  a 
military  faction. 

In  considering  this  matter,  it  is  important  to  bear  in  mind 
that,  while  there  has  recently  been  a  change  in  government 
in  Mexico,  there  has  been  no  real  change  in  either  party  or 
policy.  The  same  military  faction  has  controlled  Mexico 
for  the  past  seven  years.  No  distinction  can  be  drawn  be- 
tween the  Carranza  government  and  that  of  General  Obre- 
gon,  since  they  represent  the  same  party  and  are  composed 
of  virtually  the  same  men.  It  is  of  the  utmost  importance 
that  this  fact  be  fully  appreciated.  It  was  General  Obregon 
who  first  occupied  and  held  Mexico  City  for  Carranza  in 
1915.  When  the  American  Government  protested  against 
his  conduct  there,  it  directed  the  protest  to  Carranza  at 
Vera  Cruz.  Parenthetically,  in  view  of  demands  for  uncon- 
ditional recognition,  the  following  excerpt  from  this  protest 
is  now  of  interest: 

"The  Government  of  the  United  States  has  noted  with 

IS 


increasing  concern  the  reports  of  General  Obregon's 
utterances  to  the  residents  of  Mexico  City.    The  Gov- 
ernment believes  they  tend  to  incite  the  populace  to 
commit  outrages  in  which  innocent  foreigners  within 
Mexican  territory,  particularly  in  the  City  of  Mexico, 
may  be  involved.    This  Government  is  particularly  im- 
pressed with   General   Obregon's   suggestion  that  he 
would  refuse  to  protect  not  only  Mexicans  but  foreign- 
ers in  case  of  violence,  and  that  his  present  manifesto 
is  a  forerunner  of  others  more  disastrous  in  effect.    .     . 
"The  Government  of  the  United  States  is  led  to  be- 
lieve  that   a   deplorable   situation   has   been   wilfully 
brought  about  by  Constitutionalist  leaders  and  forces 
upon  a  populace  submissive  to  their  incredible  demands, 
and  to  punish  the  city  on  account  of  refusal  to  comply 
with  them.    When  a  factional  leader  preys  upon  a  starv- 
ing city  to  compel  obedience  to  his  decrees  by  inciting 
outlawry  and  at  the  same  time  uses  means  to  prevent 
the  city  from  being  supplied  with  food,  a  situation  is 
created  which  it  is  impossible  for  the  United  States  to 
contemplate  longer  with  patience.    Conditions  have  be- 
come intolerable  and  can  no  longer  be  endured." 
General  Obregon  was  later  Secretary  of  War  in  the  Car- 
ranza  government.    Under  leave  of  absence  as  a  general  in 
the  army,  he  conducted  his  campaign  for  the  presidency  and 
in  the  course  of  this  campaign  headed  the  revolution  which 
overthrew  Carranza.     Nearly  all  of  the  members  of  the 
Obregon  cabinet  formed  a  part  of  Carranza's  government. 
Pani,  now  Minister  of  Foreign   Affairs,   was   Carranza's 
Minister  to  France;  Calles,  now  Minister  of  Interior,  was 
Carranza's  Minister  of  Commerce  and  Industry — he  secured 
a  f(:w  weeks'  leave  of  absence  to  start  the  revolution  against 
Carranza  in  Sonora;  de  la  Huerta,  now  Minister  of  the 
Treasury,  was  governor  of  Sonora,  first  appointed  by  Car- 
ranza; Zubaran,  now  Minister  of  Commerce  and  Industry, 
was  Carranza's  Minister  to  Germany ;  Ortiz  Rubio,  Obregon's 
Minister  of  Communications  until  a  few  weeks  ago,  was 
governor  of  Michoacan  under  Carranza.     The  officials  in 
the  Department  of  Commerce  and  Industry  who  had  charge 
under  Carranza  of  the  scheme  to  confiscate  American  oil 
properties,  are  still  there  in  the  same  capacity. 

When  the  Carranza-Obregon  party  began  its  revolution, 

16 


Americans  had  suffered  only  the  incidental  consequences  of 
revolutionary  strife.  Until  that  time,  Mexico's  laws  with 
reference  to  foreigners  and  to  property  rights  were  in  keep- 
ing with  the  practice  prevailing  in  the  most  civilized  coun- 
tries. The  Mexican  government,  by  constant  effort  through 
a  quarter  of  a  century,  had  established  for  Mexico  a  well- 
earned  reputation  for  recognizing  and  complying  with  its 
national  and  international  obligations. 

With  the  rise  to  power  of  the  Carranza-Obregon  party, 
the  policy  of  the  Mexican  government  changed.  This  mili- 
tary faction  came  into  power  on  a  program  of  war  on  Ameri- 
cans, war  on  property  rights,  and  war  on  religion.  It  is 
unnecessary  to  recount  here  the  pathetic  story  of  the  wanton 
destruction  of  American  lives,  in  many  instances  by  soldiers 
in  the  service  of  the  government,  of  the  contempt  with  which 
the  Federal  authorities  treated  the  representations  of  the 
American  Government,  and  of  the  action  of  the  courts  in 
withholding  punishment  from  military  assassins  and  bandits 
alike.  The  long  list  of  these  outrages  is  a  matter  of  record 
in  the  State  Department.  Only  one  case  of  reparation  dur- 
ing all  of  these  years  has  come  to  the  knowledge  of  the 
American  Association  of  Mexico,  and  that  an  award  of 
damages  for  the  death  of  an  American  while  Mexico  City 
was  in  the  possession  of  a  faction  at  war  with  Carranza  and 
Obregon.  The  American  Association  does  not  know  of  a 
single  instance  of  punishment  for  the  murder  of  Americans. 

We  believe  that  now  is  the  time  to  settle  all  the  differences 
that  exist  between  the  American  Government  and  the  de 
facto  government  of  General  Obregon.  To  defer  settlement 
until  after  the  recognition  of  that  government  would  be  to 
repeat,  with  more  dangerous  consequences,  the  mistake  that 
was  made  in  the  recognition  of  the  Carranza  government, 
and  to  render  future  negotiations  difficult  by  the  introduc- 
tion of  matters  foreign  to  the  relations  of  the  two  countries. 

The  necessity  of  a  formal  agreement  with  the  present 
Mexican  government  will  be  readily  seen  when  it  is  recalled 
that  the  Carranza  government  was  given  de  facto  recogni- 
tion on  the  basis  of  a  proclamation  which  that  government 
issued  to  the  Mexican  people,  the  text  of  which  had  been 
approved  by  the  American  Government  in  advance,  and  of 
a  public  statement  by  the  Carranza  representative  at  Wash- 
ington, in  both  of  which  the  most  ample  assurances  were 

17 


given  of  protection  to  American  citizens  and  the  recognition 
of  their  rights.  Hardly  had  recognition  been  granted  when 
the  Carranza  government  began  by  executive  decree  its  anti- 
American  program,  which  culminated  in  the  adoption,  by 
the  Carranza  military  faction,  of  the  so-called  Constitution 
of  1917.  The  Carranza  government  was  granted  de  jure, 
but  conditional  recognition,  by  the  presentation  of  Ambassa- 
dor Fletcher's  credentials  on  March  3,  1917,  after  protest 
against  various  articles  in  the  constitution,  and  after  verbal 
assurances  had  been  given  to  Ambassador  Fletcher  by  Car- 
ranza's  Minister  of  Foreign  Affairs  that  such  articles  would 
not  be  invoked  to  the  detriment  of  American  interests. 

The  Carranza  constitution  destroys  the  foundation  of 
private  property  in  Mexico  and  establishes  a  basis  for  the 
gradual  elimination  of  American  citizens  from  business  en- 
terprises in  that  country.  We  will  not  take  the  time  of  the 
Secretary  to  analyze  this  instrument  with  respect  to  its 
effects  on  American  citizens,  but  will  merely  recall  to  his 
mind  that  under  this  so-called  constitution,  American  citi- 
zens have  been  deprived  of  the  right  to  purchase  real  estate 
in  Mexico,  an  American  minister  of  the  gospel  may  not  exer- 
cise his  sacred  office  in  that  country  under  any  circum- 
stances, an  American  citizen  may  be  expelled  by  the  federal 
executive  without  right  of  trial  by  Mexican  courts  or  of 
appeal  to  his  own  government,  that  he  may  be  deprived  of 
his  real  property  by  executive  decree,  and  that  in  the  ac- 
quisition of  any  property  he  must  renounce  his  citizenship 
and  waive  his  right  to  diplomatic  protection. 

This  constitution  has  been  accepted  unchanged  by  the 
government  of  General  Obregon,  and  if  this  government  is 
recognized  by  the  American  Government,  the  disabilities  of 
American  citizens  will  be  crystallized  and  rendered  perma- 
nent- Both  before  the  adoption  of  the  so-called  Constitution 
of  1917  and  subsequent  thereto,  the  American  Government 
protested  against  the  anti-foreign  provisions  of  that  instru- 
ment. So  far  as  we  know,  those  protests  have  never  been 
withdrawn,  nor  has  the  American  Government  recognized 
the  validity  of  those  provisions. 

The  recognition  now  of  the  Obregon  government  without 
a  prior  written  agreement  as  to  the  effects  of  the  constitu- 
tion on  American  citizens  would,  in  our  opinion,  constitute 
an  embarrassing  acceptance  of  the  constitution  and  the 

18 


validity  of  laws  based  thereon,  and  might  be  tantamount  to 
a  waiver  of  the  rights  of  American  citizens  in  that  country. 
It  would  probably  have  the  effect  of  placing  the  American 
Government  in  the  disadvantageous  position  of  submitting, 
or  refusing  to  submit,  the  determination  of  these  matters 
to  foreign  powers  who  might  with  propriety  offer  their  good 
offices  in  the  arbitration  of  differences  between  the  American 
Government  and  a  Mexican  government,  recognized  by  the 
American  Government,  and  in  consequence  thereof  recog- 
nized by  all  other  governments. 

This  Association  does  not  subscribe  to  the  belief  which 
prevails  in  some  quarters  that  the  United  States  should  con- 
sult Latin  America  in  the  determination  or  execution  of  its 
policy  with  respect  to  Mexico.  Nevertheless,  we  feel  that 
unnecessary  complications  and  much  criticism  would  be 
avoided  by  securing  a  definite  and  binding  agreement  with 
Mexico  as  a  basis  for  recognition,  an  agreement  which  can 
only  concern  the  American  Government  and  the  de  facto 
Mexican  government.  Negotiations  would  assume  a  differ- 
ent form  if  the  United  States  should  first,  by  extending 
recognition,  give  to  the  Obregon  administration  the  status 
of  a  de  jure  government.  Prior  to  recognition  we  deal  with 
a  dominant  revolutionary  faction,  to  which  we  may  give  or 
withhold  recognition  as  best  suits  the  interests  of  our  people ; 
subsequent  thereto  we  deal  with  a  government,  and  in  mak- 
ing demands  lay  ourselves  open  to  the  charge  of  attempting 
to  impose  our  will  on  a  weaker  government,  constituted  and 
accepted  under  the  rules  of  international  law. 

It  is  patent  that  a  fundamental  basis  for  the  recognition 
of  a  government  is  the  ability  and  intention  of  that  govern- 
ment to  comply  with  its  international  obligations.  We  sub- 
mit that  the  espousal  of  the  Carranza  constitution  by  the 
present  de  facto  government  of  Mexico  constitutes  in  itself 
indisputable  evidence  of  intention  not  to  comply  with  such 
obligations.  ^ij 

The  American  Association  regards  the  choice  of  an  am- 
bassador as  an  important  part  of  the  Mexican  program  of 
the  American  Government.  While  we  realize  that,  previous 
to  recognition,  consideration  of  this  matter  would  be  pre- 
mature»  we  ask  that  we  be  permitted  to  avail  ourselves  of 
this  opportunity  to  present  for  consideration  some  phases 
of  this  matter  that  have  impressed  themselves  on  us  in  our 

19 


long  residence  in  Mexico.  We  trust  that  our  suggestions 
will  be  understood  to  be  tentative  and  general  and  as  being 
made  in  an  endeavor  to  present  to  the  American  Government 
a  view  of  the  situation  that  particularly  impresses  us  as  resi- 
dents of  Mexico.  Also,  it  has  seemed  to  us  that  it  might  not 
be  inappropriate  to  express  our  views  because  of  the  active 
campaign  in  connection  with  the  selection  of  an  ambassador 
that  is  now  being  made  in  the  United  States,  apparently  on 
the  assumption  that  the  Mexican  de  facto  government  has 
the  right  not  only  to  demand  recognition,  but  to  be  heard 
in  the  selection  of  an  ambassador. 

Some  years  ago,  the  American  Government,  in  recognition 
of  the  importance  of  its  relations  with  Mexico  and  of  its 
responsibility  to  its  own  citizens  and  to  other  nations  as  well, 
raised  its  diplomatic  post  there  to  the  dignity  of  an  embassy. 
Today  the  American  Ambassador  is  the  only  diplomat  in 
Mexico  holding  that  rank,  and,  as  such,  is  the  dean  of  the 
diplomatic  corps  and  its  leader  and  spokesman.  If  that  post 
has  been  important  in  the  past,  when  the  relations  of  the 
two  countries  were  formal  and  cordial,  how  much  greater 
responsibility  it  will  bear  now  as  the  channel  for  the  expres- 
sion of  important  policies  of  far-reaching  influence  ? 

From  our  observation,  we  would  submit  that  the  character, 
attainments  and  prominence  of  the  American  ambassador 
are  of  peculiar  importance  and  grave  concern.  This  is 
evidenced  by  the  interest  now  manifested  in  this  selection 
by  the  Mexican  press  and  by  the  diplomatic  corps  in  Mexico 
City.  We  believe  that  our  new  ambassador  should,  of  course, 
be  a  man  without  business  interests  in  Mexico  and  one  who 
has  not  represented  such  interests ;  he  should  be  free  from 
the  local  border  point  of  view  and  should  be  unencumbered 
by  present  or  past  factional  relations  in  that  country. 

The  next  ambassador  should  measure  up  fully  to  the  re- 
quirements of  his  position  in  this  delicate  situation.  If  not 
selected  from  the  corps  of  trained  diplomats  who  have  seen 
service  abroad,  he  should,  in  our  opinion,  be  an  American 
of  national  prominence  who  would  lend  prestige  to  the  post 
and  whose  appointment  would  in  itself  be  an  indication  to 
Mexico  and  the  world  of  the  importance  which  the  American 
Government  attaches  to  the  execution  of  its  policy  in  Mexico. 

While  the  American  Association  has  no  candidate  for  the 
Mexican  post,  it  would  suggest  as  illustrating  the  type  of 

7ft 


man  it  has  in  mind,  such  Americans  as  John  Bassett  Moore, 
David  Jayne  Hill  and  General  Leonard  Wood. 

The  Association  is  of  the  opinion  that  the  next  ambassador 
to  Mexico  should  be  a  man  of  wide  vision,  free  from  present 
or  previous  connections  which  would  give  suspicion  of  biased 
judgment.  Such  qualities  would  enable  him  to  judge  wisely 
of  men,  conditions  and  events.  His  opinions  would  be  ac- 
cepted by  his  own  Government  and  would  carry  weight  in 
Mexico  and  abroad. 


21 


THE  INTERNATIONAL  FACTOR  IN  MEXICO'S 
INTERNAL  POLITICS 

A  Sound  American  Program  Based  on  American  Rights 
Not  the  Road  to  Intervention 

(Not  Issued  as  a  Separate  Bulletin — April  16,  1921) 

Though  the  Harding  administration  is  little  more  than  a 
month  old  pressure  is  already  being  brought  to  bear  on  high 
officials  at  Washington  for  immediate  and  unconditional 
recognition  of  the  Obregon  government.  Special  envoys  are 
employing  methods  similar  to  those  used  in  the  cases  of 
Carranza  and  others.  It  is  urged  that  Obregon  is  the  only 
available  man  capable  of  giving  Mexico  a  just  government, 
that  his  overthrow  would  mean  chaos,  as  a  result  of  which 
Americans  resident  in  Mexico  would  suffer  in  their  persons 
and  business,  and  armed  intervention  on  the  part  of  the 
United  States  would  become  compulsory.  These  and  other 
related  matters  were  brought  up  in  the  audience  granted 
by  the  Secretary  of  State  on  April  11,  1921,  to  committees 
from  the  American  Association  of  Mexico  and  the  National 
Association  for  the  Protection  of  American  Rights  in 
Mexico.  To  make  its  position  clear,  the  American  Associa- 
tion has  submitted  a  supplementary  memorandum  to  Secre- 
tary Hughes  covering  the  following  points : 

1.  The  statement  that  General  Obregon  is  the  only  man 
in  Mexico  capable  of  giving  the  country  a  just  government 
is  far  from  the  truth.  A  nation  that  could  in  a  single  gen- 
eration produce  Porfirio  Diaz,  Limantour,  Pablo  and  Miguel 
Macedo,  Ignacio  Mariscal,  Justo  Sierra  and  many  others  of 
the  type  could  not  be  entirely  lacking  today  in  men  of 
political  and  executive  ability.  Men  of  this  type  do  not  hold 
office  now,  as  their  political  activity  has  been  proscribed  by 
the  Carranza  and  Obregon  governments  and  consequently 
they  are  not  known  abroad.  They  are  intimidated  and  help- 
less under  present  conditions  because  they  believe  it  to  be 
the  deliberate  policy  of  the  American  government  that  in- 
dividuals like  Carranza  and  Obregon  should  rule  Mexico. 
These  Mexicans  have  sufficient  knowledge  of  international 
relations  and  world  conditions  to  appreciate  the  necessity, 
today  as  never  before,  for  Mexico  to  be  in  close  harmony 
with  the  United  States.    They  realize  that  in  working  out 

22 


the  problems  of  Mexico's  reconstruction  after  ten  years  of 
internal  strife,  the  friendly  cooperation  of  this  country  is 
imperative. 

2.  The  negotiations  between  the  representatives  of 
President  de  la  Huerta  and  Secretary  of  State  Colby  were 
abandoned  when  the  then  head  of  our  State  Department 
suggested  that  verbal  assurances  of  reforms  be  embodied  in 
a  convention  to  be  signed  by  both  countries.  That  incident 
illustrated  the  elusiveness  of  representatives  of  successful 
Mexican  revolutionists  in  the  matter  of  binding  promises. 
This  Association  believes  that  such  a  protocol  or  treaty  is  a 
necessity  to  assure  American  rights  in  Mexico  and  holds 
that  speculation  as  to  the  inclination  or  ability  of  General 
Obregon  to  sign  a  convention  of  this  character  are  beside 
the  question.  It  is  our  judgment  that  the  American  gov- 
ernment should  not  deviate  from  a  sound  policy  of  requiring 
such  an  agreement,  whatever  the  temporary  consequences. 
If  General  Obregon  fails  to  sign  a  convention  because  he  is 
unwilling  or  unable  to  do  so,  in  our  opinion  he  is  not  entitled 
to  recognition. 

3.  This  Association  is  informed  that  Mexican  envoys 
have  urged  upon  our  government  the  expediency  of  conduct- 
ing negotiations  confidentially,  alleging  that  a  public  an- 
nouncement of  an  American  policy  containing  demands  upon 
the  Obregon  administration  might  embarrass  him  and  con- 
tribute to  the  overthrow  of  his  government.  Suggestions 
from  outsiders,  on  this  point,  in  our  opinion  overstep  the 
limits  of  propriety.  It  is  to  be  presumed  that  the  negotia- 
tions will  be  conducted  in  a  manner  conducive  to  securing 
the  ends  desired.  However,  it  is  the  view  of  this  Association 
that  in  the  event  of  failure  of  negotiations  to  secure  a  treaty 
or  other  convention,  the  policy  of  the  United  States  should 
be  publicly  announced,  as  a  matter  of  justice  to  the  American 
people  and  in  order  to  give  the  Mexican  people  opportunity 
to  remedy  the  situation  if  they  so  desire. 

4.  This  Association  is  informed  that  an  effort  is  being 
made  to  secure  recognition  from  our  government  on  the 
ground  that  chaos  in  Mexico  would  result  from  the  fall  of 
the  Obregon  government.  In  the  judgment  of  the  American 
Association,  it  is  imperative  that  our  government  adopt  a 
policy  based  solely  on  principles  of  right  and  justice  and  re- 
gardless of  temporary  effects .  in  Mexico  or  the  attitude  of  , 

22 


General  Obregon.  This  Association  prefers  a  temporary 
state  of  chaos  in  Mexico  to  a  continuance  of  present  condi- 
tions. It  believes,  in  making  this  statement,  that  it  voices 
likewise  the  general  feeling  of  Americans  in  Mexico,  and 
has  no  doubt  that  it  expresses  the  opinion  held  by  the  Mexi- 
can people.  Americans  there  have  been  ready  and  willing 
during  the  recent  years  of  trouble  to  take  whatever  chances 
might  come  in  consequence  of  the  action  of  their  government 
in  making  vigorous  representations  to  the  Mexican  govern- 
ment. We  submit  that  the  record  of  the  last  ten  years 
proves  that  American  lives  and  property  have  been  de- 
stroyed, not  as  a  result  of  just  demands  upon  Mexico,  nor 
even  during  the  several  periods  of  physical  intervention,  but 
on  the  contrary  almost  invariably  because  of  a  weak  and 
vacillating  policy  based  on  a  misconception  by  our  govern- 
ment of  its  duties. 

5.  This  Association  is  an  ardent  advocate  of  returning  to 
the  practice  of  formulating  a  policy  based  on  the  rights  of 
American  citizens — if  the  policy  be  sound,  the  result  must 
be  beneficent.  To  speculate  upon  the  effects  on  internal 
Mexican  politics  would  be  to  bring  into  the  formulation  of 
our  policy  considerations  that  are  not  sanctioned  by  the 
precepts  of  international  law. 

6.  The  American  Association  has  not  regarded  it  to  be 
within  its  province  to  advocate  any  particular  remedy  for 
the  Mexican  problem.  It  has  limited  its  efforts  to  pointing 
out  the  menace  to  American  citizens  in  the  present  situa- 
tion, and  to  advocating  the  non-recognition  of  any  Mexican 
government  until  this  menace  shall  have  been  removed. 
The  officers  of  this  Association,  however,  do  not  hesitate  to 
express  their  opinion  as  individuals  (the  Association  itself 
cannot  have  an  opinion  in  this  matter)  that  the  alternative 
to  General  Obregon  is  not  armed  intervention  but  rather  a 
state  in  which  Mexico  shall  be  ruled  by  those  of  her  citizens 
who  have  conceptions  of  the  national  and  international 
duties  of  the  Mexican  government.  A  continuance  of  Presi- 
dent Obregon  on  a  basis  other  than  unreserved  recognition 
of  the  rights  of  American  citizens,  which  will  bring  as  a 
corollary  justice  to  other  foreigners  and  to  Mexicans,  is 
the  sure  road  to  armed  intervention,  just  as  the  recognition 
of  the  Carranza  government  was  the  first  step  toward  the 
present  situation  bordering  on  intervention.    We  are  getting 

24 


away  from  intervention  when  we  cease  attempting  to  dictate 
who  shall,  or  who  shall  not,  be  president  of  Mexico,  and  get 
back  to  the  sane  and  unassailable  principles  that  should 
guide  one  government  in  its  relations  to  another. 

7.  We  cannot  emphasize  too  strongly  the  fact  that  the 
Mexican  people  are  not  in  sympathy  with  General  Obregon 
in  his  espousal  of  a  constitution  which  must  eliminate  the 
AmeHcan  from  Mexico,  just  as  they  were  not  in  sympathy 
with  Carranza  in  this  respect.  We  believe  that  if  it  should 
become  known  that  the  American  government  has  refused 
to  recognize  the  Obregon  government  because  of  its  failure 
to  agree  to  do  justice  to  Americans,  and  consequently  to 
other  foreigners  in  Mexico,  the  Mexican  people  would  them- 
selves apply  the  remedy. 

8.  We  are  convinced  that  the  present  inertness  of  the 
Mexican  people  is  due  to  inability  to  react  promptly  after 
the  intimidation  and  bullying  to  which  they  have  been  sub- 
jected by  the  American  government  for  the  past  eight  years, 
and  that  they  will  not  believe  that  our  government  has 
changed  its  policy  of  meddling  in  their  internal  affairs  in 
the  interest  of  revolutionary  chieftains  until  there  is  un- 
equivocal indication  of  the  new  policy  from  the  proper  offi- 
cials of  the  American  government. 


25 


AMERICAN  RIGHTS  AND  MEXICO'S  LAND 

LAWS 

Discussion  of  the  Provisions  of  the  Constitution  of  1917  as 

Affecting  the  Acquisition  and  Ownership  of 

Real  Estate  by  Foreigners 

(BULLETIN  Xo.  4— Issued  August  25,  1921) 

The  American  Association  of  Mexico  desires  to  place  be- 
fore its  members  certain  observations  with  respect  to  re- 
strictions placed  upon  American  citizens  by  the  so-called 
Constitution  of  1917,  denying  to  them  the  right  to  acquire 
land  in  Mexico.  The  question  is  one  of  such  importance  from 
a  political  and  economic  standpoint  that  the  Association  be- 
lieves its  members  should  be  advised  of  the  effects  of  this 
provision  on  the  status  of  Americans  in  Mexico,  on  the 
peace  and  prosperity  of  the  Mexican  people  and  on  the  per- 
manence of  cordial  relations  between  the  two  countries.  It 
may  be  mentioned  that  the  views  embodied  in  this  Bulletin 
have  been  placed  before  Secretary  of  State  Charles  E. 
Hughes. 

With  reference  to  allowing  aliens  to  acquire  land  in 
Mexico,  the  Constitution  of  1917  divides  the  territory  of  the 
republic  into  two  great  zones.  In  the  prohibited  zone,  which 
comprises  about  40%  of  the  national  territory,  an  American 
may  not  acquire  land  under  any  circumstances.  In  the  re- 
mainder of  the  country,  which  may  be  termed  the  zone  of 
tolerance,  he  is  equally  denied  the  right  to  purchase  land 
but  he  may  be  permitted  to  do  so  as  a  matter  of  executive 
grace  or  favor  after  complying  with  defined  conditions. 

The  prohibited  zone  consists  of  all  land  within  approxi- 
mately sixty  miles  of  the  northern  and  southern  frontiers 
and  within  approximately  thirty  miles  of  either  coast.  It 
includes  precisely  the  districts  in  which  American  citizens 
would,  as  a  rule,  desire  to  purchase  land,  and  it  is  within  this 
territory  that  the  greater  part  of  the  American  holdings  in 
real  estate  now  lies.  Within  its  boundaries  are  the  land 
nearest  the  United  States,  the  productive  land  along  the 
Atlantic  and  Pacific  seaboards,  the  present  Tampico  oil  field, 
and  prospective  oil  fields  along  the  entire  Gulf  Coast.  It 
will  serve  to  illustrate  the  effect  of  this  provision  to  state 

26 


that  not  one  of  the  four  thousand  Americans  who  make 
their  homes  in  Tampico  may  purchase  a  lot  in  that  city. 

An  American  citizen,  seeking  to  obtain  land  in  the  zone 
of  tolerance,  must  in  each  case  ask  permission  of  the  execu- 
tive, and  in  the  event  that  permission  be  given,  he  must 
agree  to  waive  his  right  to  diplomatic  protection  with  re- 
spect to  the  property.  While  waiver  of  diplomatic  protec- 
tion is  required  of  an  American  before  he  is  permitted  to 
acquire  real  estate,  it  is  not  mandatory  on  the  executive  to 
grant  permission  where  this  condition  is  fulfilled.  The 
executive  enjoys  unrestricted  power  to  grant  or  deny  the 
petition  as  he  sees  fit;  the  law  allows  the  petitioner  no 
appeal  or  legal  recourse  in  case  his  petition  is  denied.  These 
conditions  place  the  American  in  the  position  of  an  applicant 
for  a  privilege ;  he  possesses  no  rights  whatsoever  under  the 
law. 

This  fundamental  change  in  Mexican  law  creates  a  situa- 
tion, in  our  opinion,  which  it  behooves  the  American  govern- 
ment and  people  to  face  frankly  as  it  is  filled  with  potential 
trouble  for  the  future. 

The  American  Association  is  of  the  opinion  that  no  gov- 
ernment in  Mexico  which  insists  on  this  policy  should  be 
recognized  and  that  it  is  important  for  our  government  to 
study  the  situation  thoroughly  and  to  take  no  step  toward 
giving  sanction  to  these  principles  withou-t  a  full  understand- 
ing of  the  far-reaching  consequences  of  its  action. 

From  a  political  and  economic  standpoint,  the  following 
objections  lie  against  the  provision  depriving  Americans  of 
the  right  to  own  and  acquire  land : 

1.  It  threatens  the  virtual  confiscation  of  American- 
owned  land  in  the  prohibited  zone. 

2.  It  accomplishes  the  partial  confiscation  of  American- 
owned  land  in  the  zone  of  tolerance. 

3.  Its  restrictions  are  tantamount  to  a  prohibition 
against  the  immigration  of  American  farmers  and  ranchers 
desiring  to  settle  in  Mexico. 

4.  It  inflicts  a  needless  humiliation  on  Americans,  which 
affects  their  standing  and  influence. 

5.  It  may  be  used  to  involve  us  with  other  countries. 

6.  It  places  the  acquisition  of  land  by  Americans  on  the 

27 


basis  of  a  concession,  thus  supplying  a  fruitful  source  of 
difficulty  between  this  country  and  Mexico. 

7.  It  violates  the  principle  of  reciprocity. 

8.  It  will  retard  the  economic  development  of  Mexico 
and  work  against  internal  peace. 

9.  If  sanctioned  by  our  government,  it  will  establish  a 
dangerous  precedent,  affecting  the  influence  of  the  United 
States  throughout  Latin  America. 

Each  of  the  points  mentioned  merits  a  somewhat  detailed 
analysis  and  discussion.  They  will  be  considered  in  the  fore- 
going order: 

1.  There  is  pending  before  the  Federal  Congress  a  bill 
submitted  by  President  Carranza,  which,  if  enacted  into  law, 
will  authorize  the  Mexican  government  to  expropriate 
American-owned  properties  in  the  Tampico  district  for  a 
fraction  of  their  actual  value. 

2.  The  provision  accomplishes  indirectly  a  partial  con- 
fiscation of  property  acquired  by  Americans  previous  to  the 
adoption  of  the  Constitution,  in  that  it  does  away  with  a 
profitable  market  for  their  land.  It  is  proverbial  that  Mexi- 
cans will  not  pay  as  high  a  price  for  land  as  foreigners,  par- 
ticularly Americans.  Now  that  aliens  have  been  deprived 
of  the  right  to  purchase  land,  they  are  no  longer  feared  as 
competitors  and  Mexicans  will  be  able  to  purchase  such  land 
cheaply. 

The  memorandum  of  protest  against  the  Agrarian  Law 
of  the  State  of  San  Luis  Potosi,  delivered  to  General  Obregon 
by  American  Charge  d' Affaires  Summerlin  in  Mexico  City 
in  April,  indicates  that  the  State  Department  is  thoroughly 
alive  to  the  situation  arising  from  government  expropriation 
and  subdivision  of  land  without  other  compensation  to  the 
owners  than  that  of  worthless  state  bonds. 

3.  The  provision  is  designed  to  stop  American  immigra- 
tion and  to  eliminate  the  American  citizen  as  a  factor  in  the 
development  of  the  resources  of  Mexico.  If  allowed  to  stand, 
it  will  accomplish  this  purpose.  It  erects  an  international 
spite-fence,  an  artificial  barrier  to  our  natural  outlet  to  the 
south,  and  will  keep  differences  alive  as  spite-fences  usually 
do.  . 

Mexico  is  within  a  special  sphere  of  American  influence 
and  Mexicans  and  Americans  resident  in  Mexico  realize  that 


no  Mexican  government  can  prosper  and  endure  unless  it 
enjoys  the  cordial  friendship  and  support  of  the  United 
States.  Nominally,  the  European  powers  and  Japan  deal 
directly  with  Mexico.  In  practice  they  take  no  important 
step  without  consultation  with  Washington,  virtually  hold- 
ing our  government  responsible  for  its  southern  neighbor. 
The  United  States  not  only  accepts  this  special  position  but 
insists  it  shall  be  recognized  by  other  nations. 

We  feel  that  these  hard  facts  should  be  faced  frankly  and 
given  their  due  importance  in  the  shaping  of  our  Mexican 
policy.  Failure  to  do  so  now  will  result  in  the  establishment 
of  precedents  which  will  multiply  trouble  for  the  future. 
Recognition  of  Obregon  under  present  conditions  would  be 
regarded  as  an  acceptance  of  existing  land  laws  and  future 
Mexican  governments  would  rely  on  this  as  a  precedent. 
These  laws  affect  other  aliens  as  well,  thus  placing  a  double 
responsibility  upon  our  government. 

We  would  object  if  Mexico  attempted  to  cede  Magdalena 
Bay  to  Japan  as  a  naval  base  because  it  would  be  a  threat 
at  the  prestige  and  influence  of  the  United  States.  Equally 
we  believe  our  government  should  not  recognize  and  support 
a  Mexican  government  upholding  measures  working  toward 
precisely  this  same  end,  the  injury  of  Americans  and  the  be- 
littling of  their  influence  and  prestige. 

Arguments  based  on  restrictions  placed  by  certain  state 
governments  of  the  United  States  on  immigration  from 
other  countries  we  do  not  regard  as  pertinent.  Suffice  to  say 
there  are  no  national  restrictions  in  the  United  States  on  the 
rights  of  a  Mexican  citizen  to  acquire  real  estate  in  this 
country. 

Furthermore,  the  American  landowner  through  his  con- 
stant and  compulsory  contact  with  natives  is,  of  all  classes 
of  Americans  resident  in  Mexico,  the  best  medium  for  estab- 
lishing a  more  intimate  understanding  between  the  peoples 
of  the  two  countries.  To  suppress  or  curtail  his  activities 
in  Mexico  is  to  put  obstacles  in  the  way  of  attaining  a  com- 
plete resumption  of  friendly  relations  on  a  permanent  basis. 

4.  The  requirement  that  an  American  citizen  shall  waive 
his  rights  to  the  protection  of  his  own  government  when  he 
acquires  land  is  a  humiliation  which,  in  our  opinion,  the 
American  government  should  not  permit.  If  the  American 
government  regards  this  waiver  as  effective  and  binding, 

29 


then  certainly  no  Mexican  government  should  be  recognized 
which  insists  on  this  provision.  If  the  American  govern- 
ment maintains  that  this  waiver  is  not  binding,  we  feel  that 
it  should  not  permit  its  citizens  to  be  humiliated  by  sub- 
mitting to  it. 

The  waiver  of  diplomatic  protection  also  has  its  effect  in 
this  respect:  Since  no  nation  recognizes  the  force  of  such 
waiver,  by  including  it  in  the  Constitution  of  1917  Mexico 
assumed  the  position  of  gratuitously  providing  a  cause  for 
diplomatic  differences  with  other  countries.  The  very  fact 
of  the  requirement  is  evidence  of  intention  to  commit  wrongs 
calling  for  diplomatic  interposition. 

The  American  citizen  who  does  business  in  Mexico  is  re- 
minded each  day  of  the  inferior  position  which  he  occupies. 
This  provision  is  in  its  very  nature  anti-American  and  its 
inclusion  in  nearly  all  contracts  that  Americans  make  in  it- 
self forecasts  the  intention  of  the  Mexican  government  to 
deprive  American  citizens  of  thdr  rights.  Any  honorable 
Mexican  government  would  not  require  a  waiver,  because 
such  a  government  would  realize  that  while  he  received  jus- 
tice at  the  hands  of  the  judiciary  or  government  officials,  the 
American  citizen  would  not  appeal  to  his  own  government, 
just  as  he  seldom  appealed  to  his  government  but  submitted 
his  rights  to  the  Mexican  courts  during  the  thirty  years 
preceding  the  recent  series  of  revolutions. 

5.  Since  the  powers  of  the  Mexican  executive  in  per- 
mitting aliens  to  acquire  land  are  not  restricted  by  law, 
but  are  unlimited  and  to  be  exercised  at  his  discretion,  con- 
ditions may  be  made  so  burdensome  to  American  citizens, 
and  they  may  be  discriminated  against  to  such  an  extent  as 
to  menace  the  peaceful  relations  of  the  two  countries.  For 
example,  in  the  exercise  of  the  authority  vested  in  him  by 
this  law,  the  executive  might  colonize  all  the  border  states 
of  the  north,  save  districts  in  the  prohibited  zone,  with 
Japanese  and  exclude  Americans  and  all  other  aliens.  Should 
a  Mexican  executive  decide  to  show  favoritism  of  this  char- 
acter at  a  time  when  our  relations  with  Japan  were  strained, 
the  reaction  of  our  government  under  such  conditions  may 
be  easily  imagined.  This  contingency  is  not  mere  idle  specu- 
lation, for  the  disposition  in  the  past  of  Mexican  officials  to 
negotiate  with  Japan  against  the  interests  of  the  United 
States  is  well  known. 

6.  The  provision  puts  in  the  hands  of  Mexican  officials 

30 


the  power  to  extort  large  sums  from  those  seeking  as  a 
privilege  what  they  formerly  enjoyed  as  a  right.  It  places 
the  acquiring  of  real  estate  by  Americans  on  the  basis  of  a 
concession  or  franchise,  concessions  being  perhaps  the  most 
productive  source  of  differences  arising  between  this  coun- 
try and  Latin  America. 

Arguments  against  a  law  under  ordinary  conditions  are 
usually  made  with  the  assumption  that  it  will  be  honestly 
and  justly  enforced.  We  submit,  however,  that  in  the 
Mexico  of  the  last  ten  years  no  sound  argument  may  be 
made  on  any  other  than  the  contrary  assumption,  if  the  law 
peaces  in  the  hands  of  officials  untrammeled  power  to  grant 
or  withhold  franchise  or  privilege.  Subornation  of  officials, 
bribery  and  corruption  invariably  result.  This  is  true  his- 
torically to  so  great  an  extent  as  to  demonstrate  that  the 
primary  object  of  such  laws  has  often  been  to  provide  offi- 
cials with  an  instrument  of  extortion. 

7.  In  the  United  States,  there  is  no  national  legislation 
which  prohibits  a  Mexican  from  owning  or  acquiring  land 
in  American  territory,  nor  is  he  placed  at  a  disadvantage  in 
this  respect  as  compared  with  the  American  citizen.  He  is 
free  to  buy  land  along  the  frontier  and  on  the  seacoast.  In 
our  border  states,  hundreds  of  Mexicans  own  and  cultivate 
farms.  Should  the  United  States  desire  to  respond  in  kind 
to  Mexico's  land  laws  and  exclude  Mexicans  from  the  right 
to  own  real  estate  in  American  territory,  there  is  a  legal 
question  as  to  whether  our  government  would  not  be  in- 
hibited from  enforcing  such  a  law  in  our  border  states  be- 
cause of  provisions  in  the  Treaty  of  Guadalupe  Hidalgo.  In 
yielding  this  territory,  Mexico  took  due  precaution  to  secure 
a  guarantee  of  the  free  enjoyment  of  liberty  and  property 
for  Mexican  citizens  resident  therein.  This  circumstance 
furnishes  an  added  reason  for  protest  against  the  enforce- 
ment by  the  Mexican  government  of  restrictions  on  Ameri- 
cans in  the  acquisition  of  land  in  Mexico. 

8.  It  will  to  a  vital  degree  retard  the  economic  develop- 
ment of  Mexico  and  the  establishment  of  a  decent  standard 
of  living  for  the  mass  of  the  people.  Geographic  proximity 
and  our  commercial  and  political  relations  make  this  a  mat- 
ter of  concern  to  the  United  States. 

Attention  must  be  called  to  the  stabilizing  influence  of  the 
proper  sort  of  immigration  and  the  necessity  for  encourag- 

31 


ing  the  American  small  farmer  and  rancher  to  settle  in 
Mexico  in  order  to  provide  a  needed  stimulus  to  agricultural 
development. 

The  American  farmer  and  ranchman  is  par  excellence  the 
American  pioneer.  He  settles  on  the  land  with  his  family 
and  stays  there.  He  would  be  a  stabilizing  element  of  im- 
measurable value  during  troublous  times.  The  day  there 
are  fifty  to  one  hundred  thousand  such  men  with  their  fam- 
ilies in  Mexico  will  mark  the  end  of  revolution  in  that 
country.  Disturbed  conditions  would  not  drive  them  from 
their  land  and  homes  as  employes  of  American  corporations 
were  driven  from  their  jobs  by  the  rising  tide  of  revolution. 
The  enormity  of  the  sacrifice  and  the  spirit  of  the  men  would 
have  made  them  stay  and  defend  their  property.  It  is  the 
opinion  of  the  American  Association  that  if  the  American 
money  invested  in  oil  and  mining  and  railroads  in  Mexico, 
or  10%  of  it,  had  been  used  by  American  settlers  to  buy 
lands,  civil  war  in  that  country  would  be  virtually  a  thing 
of  the  past. 

Mexican  revolutions  which  do  not  culminate  quickly  in  a 
coup  d'etat  start  with  small  bands  scattered  over  the  coun- 
try. The  majority  of  these  are  composed  of  bandits,  pure 
and  simple.  They  live  upon  the  country,  taking  stock  and 
foodstuffs  from  the  hacendado  and  ranchman.  The  forma- 
tion of  revolutionary  armies  comes  later  and  is  a  slow  pro- 
cess. American  pioneers  fight  for  their  own.  Resistance  to 
small  bandit  bands  in"  the  early  stages  would  cut  off  Mexican 
revolution  at  the  root  by  depriving  these  gangs  of  marauders 
of  supplies  upon  which  to  live.  We  regard  this  as  especially 
important  because  we  believe  that  the  solution  of  the  Mexi- 
can problem  essentially  lies  in  making  personal  revolutions 
impossible. 

By  her  land  laws,  as  has  been  pointed  out,  Mexico  effec- 
tively bars  this  needed  element  from  her  territory.  The 
American  small  farmer,  fruit  grower  and  ranchman  was 
just  beginning  to  establish  himself  in  Mexico  when  the 
Madero  revolution  came.  Another  decade  of  peace  would 
have  found  the  type  so  numerous  as  to  have  made  general 
revolutionary  conditions  impossible.  A  factor  for  peace, 
he  would  be  a  greater  influence  still  as  an  economic  asset 
of  Mexico,  as  an  example  of  industry  and  thrift,  and  an  in- 
structor in  modern  methods  of  cultivating  the  soil.     The 

32 


record  of  this  class  of  Americans  in  Mexico  during  the  latter 
years  of  Porfirio  Diaz  demonstrates  this. 

The  Mexican  people  are  facing  a  desperate  economic  situa- 
tion. Foreign  property  has  been  destroyed  and  obligations 
incurred  by  the  Mexican  government  amounting  to  hundreds 
of  millions  of  dollars  remain  unpaid.  Ranching,  one  of  the 
greatest  industries  of  Mexico,  virtually  has  been  wiped  out 
as  a  result  of  the  depletion  of  the  live  stock  in  that  country ; 
farm  productivity  has  been  greatly  reduced  and  the  Mexican 
people  deprived  of  their  cash  resources  by  the  issue  of  hun- 
dreds of  millions  of  pesos  in  paper  money,  long  since  re- 
pudiated ;  banks  were  looted  and  closed,  thus  destroying  the 
means  of  public  and  private  credit.  Taxes  for  the  purpose 
of  internal  government  have  been  raised  to  a  point  that 
borders  on  confiscation. 

The  greater  part  of  the  wealth  of  Mexico  is  in  her  land. 
Consequently,  the  landowner  must  bear  the  burden  of  the 
taxation  that  will  be  necessary  to  rehabilitate  Mexico.  The 
only  possible  way  for  him  to  meet  this  situation  is  to  dispose 
of  a  part  of  his  land  to  the  best  purchaser — the  American 
citizen.  There  is  little  anti-American  sentiment  among  the 
people  of  Mexico  and  the  schemes  of  the  demagogues  who 
have  controlled  that  country  since  the  advent  of  Carranza 
to  deprive  Americans  of  the  right  to  own  land,  are  not  sup- 
ported by  the  sentiment  of  the  Mexican  people  or  Mexican 
landowners. 

The  principal  need  of  the  Mexican  people  is  the  develop- 
ment of  their  land,  and  this  can  best  be  accomplished  by  the 
example  of  the  American  farmer  and  ranchman.  The  Mexi- 
cans also  need  lessons  in  industry,  in  frugality  and  in  re- 
spect for  constituted  authority,  and  these  things  they  will 
learn  from  American  neighbors.  The  Mexican  farm  laborer 
needs  better  wages,  better  living  conditions  and  better 
schools,  and  his  best  chance  to  get  these  is  to  work  for  the 
industrious  and  humane  American,  whose  influence  for  the 
betterment  of  the  Mexican  working  class  is  recognized  by 
every  impartial  observer  in  that  country. 

The  Indians  of  the  rural  districts  of  Mexico  do  not  know 
how  to  farm  except  in  the  most  primitive  fashion  and  efforts 
at  subdivision  of  rural  lands  for  their  benefit  have  demon- 
strated that  the  majority  of  them  care  neither  for  the  land 
nor  for  the  responsibility  of  tilling  it  at  their  own  risk,  nor 
have  they  means  to  purchase  implements  or  work  animals, 

33 


At  this  point  it  may  be  well  to  quote  from  the  pamphlet 
"Essay  On  the  Reconstruction  of  Mexico,"  of  which  Mr. 
Manuel  Calero,  former  Secretary  of  Foreign  Affairs  and 
former  Ambassador  to  the  United  States ;  Mr.  Francisco  S. 
Caravajal,  former  President  of  Mexico  and  former  Chief 
Justice  of  the  Federal  Supreme  Court;  Mr.  Jorge  Vera 
Estaiiol,  former  Secretary  of  Public  Instruction;  Mr.  Jesus 
Flores  Magon,  former  Secretary  of  the  Interior,  and  other 
distinguished  Mexicans  are  co-authors.  The  following  is 
taken  from  chapter  4  on  "The  Naturalization  and  Civil  Status 
of  Aliens" : 

"Article  27  of  the  Queretaro  Constitution  embodies 
the  principle  that  aliens  may  not  own  real  estate,  nor 
be  granted  concessions  covering  waters,  mines,  and  the 
like,  except  by  the  grace  of  executive  authority,  after 
the  interested  party  has  made  formal  waiver  of  the 
right  to  invoke  the  protection  of  his  government. 

"While  it  is  true  that  certain  countries  do  not  grant 
aliens  the  right  to  acquire  real  estate,  we  are,  neverthe- 
less, of  the  opinion  that  Mexico  should  return  to  the 
liberal  system  that  prevailed  under  the  Constitution  of 
1857.  Having  due  regard  for  the  cultural  and  economic 
situation  of  our  native  population,  coupled  with  the 
facts  of  its  sparseness,  it  appears  advisable  to  encourage 
the  establishment  of  foreigners  in  Mexico.  Experience 
has  shown  them  to  be  elements  of  moral  progress  and 
factors  in  the  development  of  public  and  private  wealth. 
"Provisions  fixing  the  civil  capacity  of  aliens  have 
no  place  in  the  political  constitution  of  the  republic. 
They  belong  in  general  statutes,  in  special  laws  on 
naturalization,  and  in  international  treaties.  In  the 
absence  of  express  treaty  stipulations,  Mexico  must 
accept,  in  general  terms,  the  principle  of  equality  of 
civil  capacity  of  Mexicans  and  aliens,  excepting  limita- 
tions required  by  the  principle  of  reciprocity,  and  such 
other  limitations  as  arise  out  of  the  needs  of  domestic 
safety  or  of  insurance  against  international  complica- 
tions. 

"With  regard  to  foreign  corporations,  we  believe  that 
the  incapacities  placed  on  them  by  the  Queretaro  Con- 
stitution, in  provisions  similarly  incongruous  in  a  Con- 
stitution, reveal  in  the  framers  a  mistaken  appreciation 

34 


of  the  present  day  needs  of  the  country.    We  are  not 
opposed,  in  principle,  to  the  establishment  of  the  in- 
capacities, insofar  as  they  are  confined  to  the  owner- 
ship of  real  property ;  but,  at  the  same  time,  we  believe 
that  the  legislator  should  mitigate  the  severity  of  his 
theories  when  the  great  interests  of  the  nation  so  de- 
mand.   The  position  in  which  Mexico  now  finds  herself 
as  the  result  of  the  internecine  strife  and  the  condition 
of  the  world  money  market  caused  by  the  European 
war  compel  the  Mexican  statesmen  to  adopt  a  generous 
policy  which  shall  attract  to  the  country  capital  to  de- 
velop our  resources  and  contribute  to  the  moral  and 
economic  betterment  of  our  down-trodden  people.     In 
harmony  with  this  policy,  it  is  necessary  to  return  to 
the  former  system  and  to  permit  foreign  companies  to 
enjoy  the  same  rights  they  enjoyed  before  the  Quere- 
taro  Constitution,  as  the  most  practical  method  of  in- 
ducing foreign  capital  to  engage  in  Mexican  enterprises. 
At  a  later  date,  when  the  political  equilibrium  has  been 
restored,  when  the  methods  of  government  admit  of  no 
question  as  to  their  probity,  when,  in  a  word,  we  have 
conquered  the  confidence  abroad  which  we  once  en- 
joyed, the  time  will  have  come  slowly  to  force  foreign 
capital  to  operate  in  Mexico  within  the  forms  of  asso- 
ciation  prescribed   by   Mexican   law;   but  everything 
which  at  the  present  moment  is  done  in  this  regard  will 
affect  adversely  the  economic  progress  of  Mexico." 
9.     As  a  direct  influence  in  the  development  of  American 
trade,  in  making  a  market  for  American  goods,  the  Ameri- 
can settler  can  do  more  than  a  dozen  traveling  salesmen. 
If  the  precedent  of  barring  the  American  pioneer  is  per- 
mitted  to   become   established   in   Mexico,   it   will   spread 
throughout  Latin  America  to  an  extent  such  as  seriously  to 
affect  our  position  in  this  hemisphere. 

If  the  American  government  should  recognize  the  Obre- 
gon  government,  it  would  thereby  establish  the  principle 
that  American  citizens  have  not  the  right  to  own  land  in 
Mexico.  If  the  American  government  does  accept  this  prin- 
ciple, it  must  reconcile  itself  to  the  application  of  the  same 
principle  to  all  Latin  America. 


Acceptance  of  this  doctrine  as  part  of  our  Latin  American 

35 


policy,  in  our  opinion,  would  make  it  incumbent  upon  our 
government  as  a  matter  of  honesty  and  justice  to  our  citizens 
to  make  public  announcement  of  the  fact.  Furthermore, 
that  Americans  be  warned  against  purchasing  land  in 
Mexico  even  where  permission  is  given  or  at  least  the  in- 
security attached  to  such  precarious  title  be  pointed  out  to 
them.  Also,  that  in  the  treaty  to  be  negotiated  with  Mexico, 
provision  be  made  for  compensation  based  on  real  value  in 
the  sequestration  of  American-owned  lands  in  the  prohibited 
zones. 

If  the  American  government  reject  the  principle  that  an 
American  citizen  shall  not  have  the  right  to  own  land  in 
Mexico,  then  the  form  of  an  agreement  with  Mexico  that 
will  safeguard  those  rights  is  of  the  greatest  importance. 
Rumors  are  current  that  a  Supreme  Court  decision  is  to  be 
handed  down  or  a  law  passed  by  the  Mexican  Congress  to 
solve  all  questions  at  issue  between  the  two  governments 
arising  from  the  Constitution  of  1917.  We  are  at  a  loss  to 
understand  how  either  can  give  to  American  citizens  the 
right  to  purchase  land  in  the  forbidden  zones  when  the  Con- 
stitution absolutely  denies  this  right,  or  how  either  can  give 
American  citizens  the  unconditional  right  to  purchase  land 
in  the  rest  of  the  Republic  when  the  Constitution  plainly 
provides  that  this  right  shall  be  conditioned  on  executive 
permission. 


36 


OIL  COMMITTEE  TO  CONFER  WITH  OBREGON 

Petroleum  Producers  Abandon  Their  Stand  for  Complete 
Settlement  and  Arrange  for  Negotiations  on  Oil 

(BULLETIN  No.  5— Issued  August  27,  1921) 

The  Executive  Committee  of  the  American  Association  of 
Mexico  desires  to  place  before  its  members  its  views  with 
regard  to  the  departure  for  Mexico  City  of  a  committee 
composed  of  the  presidents  of  five  of  the  largest  oil  com- 
panies of  the  United  States  for  the  purpose,  as  announced 
by  President  Teagle  of  the  Standard  Oil  Company,  of  "dis- 
cussing, and,  if  possible,  adjusting  the  differences  growing 
out  of  the  recent  tax  decrees." 

We  feel  very  strongly  that  it  is  unfortunate,  just  at  this 
time,  when  negotiations  between  the  American  Government 
and  the  government  of  Mexico  for  a  general  settlement  of 
the  differences  between  the  two  countries  seem  to  be  reach- 
ing a  climax,  that  so  imposing  a  committee  should  go  to 
Mexico  and  give  undue  prominence  and  importance  to  one 
phase  of  the  international  situation. 

The  American  Association  was  formed  last  February, 
when  it  was  evident  that  the  large  oil  companies  operating 
in  Mexico  were  planning  a  campaign  to  secure  temporary 
relief  through  compromises  that  were  in  no  way  comprehen- 
sive and  that  could  not  be  considered  fair  to  the  great  bulk 
of  American  interests  in  Mexico. 

The  oil  companies  apparently  became  convinced  that  the 
best  policy  was  for  all  American  interests  to  stand  squarely 
together  and  support  the  reasonable  and  equitable  conten- 
tion of  the  American  Government  that  Mexico  make  certain 
just  commitments  before  recognition  be  accorded  any  gov- 
ernment in  charge  there.  The  Association  of  Producers  of 
Petroleum  in  Mexico  (commonly  referred  to  as  the  Oil  Asso- 
ciation) in  an  official  statement,  published  on  March  3,  1921, 
stated,  that  "the  oil  companies  also  realize,  as  anyone 
familiar  with  recent  and  present  conditions  in  Mexico  must 
understand,  that  the  particular  problem  of  the  American 
petroleum  producer  in  Mexico  cannot  be  solved  satisfactorily 
apart  from  the  solution  of  the  entire  Mexican  problem  as  it 
affects  various  American  interests.  Any  permanent  solution 
of  the  particular  problem  confronting  the  oil  companies  de- 

Z7 


pends  upon  a  full  recognition  of  the  principles  of  equity  and 
international  law,  the  violation  of  which  underlies  the  diffi- 
culties not  only  of  the  oil  companies,  but  of  all  other  Ameri- 
cans interested  in  Mexico.     .      .      ." 

Now,  we  again  see  the  Oil  Association,  without  consulting 
other  interests,  after  making  hurried  arrangements,  dispatch 
a  committee  to  Mexico  for  the  purpose  of  securing  relief 
for  the  petroleum  interests.  This  committee  departs  with 
the  intention  of  discussing  oil  business  exclusively,  notwith- 
standing the  repeated  official  declarations  of  the  Oil  Associa- 
tion that  no  satisfactory  settlement  of  the  Mexican  ques- 
tion could  be  secured  except  as  a  whole.  The  inevitable 
effect  of  the  committee's  visit  will  be  to  paralyze  absolutely 
all  other  and  more  general  efforts  until  petroleum  interests 
have  finished  their  specific  parleys  on  oil. 

The  prominence  of  the  members  in  American  business  and 
finance  cannot  be  divested  from  this  committee.  It  will  be 
credited  with  a  semi-official  character  by  the  Mexican  Gov- 
ernment, and  the  Mexican  people.  And  why  should  not  this 
be  the  impression  in  Mexico,  when  the  American  press  is 
already  predicting  the  early  recognition  of  the  Obregon  gov- 
ernment because  the  oil  companies  have  sent  a  committee 
to  Mexico.  This  indicates  that  the  press  does  not  believe 
that  the  purpose  of  the  committee  is  merely  to  discuss  the 
latest  tax  decree,  but  rather  that  it  will  endeavor  to  settle 
all  of  the  oil  companies'  difficulties  with  the  Mexican  gov- 
ernment. Press  notices  also  indicate  a  general  belief  that  a 
settlement  of  the  oil  question  will  lead  to  recognition  by  the 
American  government. 

We  realize  that,  while  the  announced  intention  of  this  oil 
committee  is  to  adjust  differences  with  regard  to  the  new 
tax,  in  all  probability  the  conference  with  President  Obregon 
will  not  be  limited  to  tax  matters.  But,  just  as  the  question 
of  an  excessive  export  tax  is  not  the  only  problem  of  the  oil 
companies,  the  oil  companies'  troubles  do  not  constitute  the 
entire  oil  question  in  Mexico,  and  the  whole  oil  question  is 
only  one  of  the  important  items  to  be  considered  in  the  total 
case  against  the  injustice  in  Mexico  today  in  constitutional 
provisions,  in  laws  and  executive  decrees  and  in  official  atti- 
tude, against  which  the  responsible  American  interests  in 
Mexico  are  aligned  with  the  American  Government. 

Attempts  to  settle  the  oil  companies'  troubles  apart  from 

38 


a  general  adjustment  of  international  differences  can  only- 
result  in  the  adoption  of  expedients  that  will  be  neither 
satisfactory  nor  lasting  in  benefits,  and  will  hinder  the 
Government's  negotiation  of  a  treaty  with  Mexico  which 
would  bring  permanent  relief  to  oil  interests  along  with 
others,  large  and  small,  equally  deserving  of  consideration. 
On  the  other  hand,  the  continued  cooperation  of  the  pe- 
troleum producers  with  other  interests  in  Mexico,  and  their 
support  of  the  position  of  the  American  Government,  un- 
doubtedly would  aid  very  materially  in  a  settlement  of  the 
various  questions  regarding  property  rights  and  the  inter- 
ests in  general  of  Americans  in  Mexico. 

If,  through  the  efforts  of  this  formidable  committee,  the 
oil  companies  should  be  able  to  force  a  compromise  on  the 
oil  tax,  or  secure  relief  in  connection  with  their  various 
complaints,  every  effort  would  be  made  by  Mexico,  through 
her  active  propagandists,  to  have  such  a  settlement  accepted 
as  a  settlement  of  the  whole  Mexican  question.  The  Obregon 
government,  in  exchange  for  special  concessions  to  the  oil 
companies,  will  endeavor  to  gain  the  cooperation  of  these 
companies  in  securing  recognition  without  doing  justice  to 
other  American  citizens. 

This,  we  feel,  must  not  be  permitted.  The  American 
people  should  be  made  clearly  to  understand,  and  the  Mexi- 
can government  must  also  comprehend,  as  we  know  the 
authorities  at  Washington  do,  that  an  adjustment  simply  of 
the  oil  companies'  troubles  cannot  by  any  means  be  consid- 
ered as  compliance  with  the  requirements  of  the  American 
Government  and  would  not  constitute  the  complete  and 
permanent  settlement  of  all  the  important  questions  at  issue 
with  Mexico  which  the  present  situation  demands. 

For  instance,  the  right  of  an  American  citizen  to  buy  land 
in  Mexico,  which  is  now  denied  by  the  Constitution  of  1917, 
would  be  in  no  way  affected  by  a  ruling  on  Article  27.  This 
point  is  fully  discussed  in  Bulletin  No.  4  of  this  Association. 

In  conclusion,  we  beg  to  submit  herewith  a  brief  mem- 
orandum to  show  that  a  settlement  by  the  oil  companies  on 
a  basis  of  the  limited  non-retroactive  effect  of  Article  27,  as 
now  contemplated  by  the  Mexican  government,  will  not  even 
solve  the  Mexican  oil  problem. 

The  views  embodied  in  this  bulletin  have  been  placed  be- 
fore the  Secretary  of  State. 

39 


THE  RETROACTIVE  EFFECT  OF  ARTICLE  27  OF  THE 
MEXICAN  CONSTITUTION  OF  1917 

Memorandum  Pointing  Out  the  Menace  to  the  American  Oil 
Industry  in  the  Acceptance  of  a  Limited  Non- 
retroactive Effect  of  Article  27,  as  Now 
Contemplated  by  the  Mexican  Government 

The  future  of  the  oil  industry  in  Mexico  should  be  con- 
sidered in  its  effect  on  the  interests  of  the  American  people, 
and  not  merely  as  relating  to  present  investments  in  Mexico 
by  American  oil  companies. 

It  is  claimed  in  Mexico,  and  is  apparently  believed  in  some 
quarters  in  the  United  States,  that  a  decision  by  the  Supreme 
Court,  or  a  law  of  Congress,  declaring  that  Article  27  of  the 
Constitution  should  not  apply  to  leases  held  by  foreign  com- 
panies prior  to  May  1,  1917 — the  date  the  constitution  be- 
came effective — would  constitute  a  settlement  of  the  Mexi- 
can oil  question.  This  judicial  decision  is  expected  daily  in 
Mexico,  and  a  bill  giving  this  interpretation  to  Article  27 
has  been  introduced  in  Congress. 

It  must  be  borne  in  mind  that  until  recently — and  possibly 
even  now — the  demands  of  the  oil  companies  did  not  go  be- 
yond this. 

It  will  be  perceived  that  this  is  a  limited  application  of 
the  principle  of  non-retroactivity.  It  is  quite  obvious  that 
if  Article  27  is  not  retroactive,  it  will  apply  merely  to  land 
which  on  May  1,  1917,  belonged  to  the  Mexican  govern- 
ment, and  that  consequently  property  owners  may  continue 
freely  to  lease  land  acquired  prior  to  that  date.  This  would 
be  the  case  whether  the  owners  were  Mexicans  or  Amer- 
icans. 

It  is  clear  that  a  limited  application  of  this  principle  will 
give  temporary  relief  to  oil  companies  in  that  it  will  permit 
them  to  develop  the  lands  they  acquired  before  May  1,  1917. 
It  is  equally  clear,  however,  that  new  American  capital  may 
not  under  such  conditions  make  investments  safely  in  Mexi- 
can oil  lands,  and  it  is  also  obvious  that  the  oil  companies 
which  have  already  invested  in  Mexico  could  not  invest  in 
new  territory  with  assurance.  It  is  also  apparent  that 
American  citizens  who  acquired  land  prior  to  May  1,  1917, 
and  who  have  not  leased  the  same,  would  lose  the  subsoil 
without  compensation,  just  as  effectually  as  would  the  com- 

40 


panies  lose  their  property  if  their  leases  were  declared  to  be 
invalid. 

The  fundamental  objection  to  this  scheme  is  that  it  is  un- 
just. There  are  also  many  other  objections.  They  are 
based,  of  course,  on  the  assumption  that  it  is  vital  to  the 
interests  of  the  American  people  that  the  oil  resources  of 
Mexico  be  developed,  and  that  American  industry  get  a  fair 
share  of  this  oil. 

1.  The  Carranza  government  did  not  have  the  right  to 
confiscate  the  subsoil  of  land  that  belonged  to  individuals; 
neither  has  the  Obregon  government  the  right  to  give  this 
effect  to  Carranza's  laws.  We  presume  there  can  be  no 
question  about  this.  Assuming  that  the  oil  companies  enter 
into  the  agreement  with  the  Mexican  government  that  we 
have  in  contemplation,  and  that  the  American  Government 
recognizes  the  Obregon  government,  this  action  will  un- 
doubtedly lead  to  the  investment  by  American  citizens  of 
large  sums  in  oil  leases  taken  directly  from  the  Mexican 
government  on  land  which,  prior  to  May  1,  1917,  belonged 
to  individuals.  It  is  likely  that  the  Mexican  government 
will,  within  the  next  few  years,  again  come  under  the  control 
of  its  law-abiding  element.  In  such  case  the  Supreme  Court 
of  Mexico  will  undoubtedly  decide  that  the  subsoil  belonged 
to  the  owners  of  the  surface  on  May  1,  1917,  and  could  not 
legally  be  appropriated  by  the  government.  The  subsoil 
and  all  oil  discovered  therein  by  American  capital  would 
thereby  be  restored  to  the  land  owners.  In  such  eVent, 
Americans  who  had  invested  in  such  leases  and  development 
would  appeal  to  their  government.  What  would  the  attitude 
of  the  American  Government  be  then?  Will  the  American 
Government  insist  that  its  citizens  are  entitled  to  their 
leases  on  the  ground  that  the  American  Government  recog- 
nized the  Mexican  government  after  the  latter  had  confis- 
cated these  properties,  and  on  the  basis  of  such  confiscation  ? 

2.  Mexico  fell  into  the  hands  of  the  anti-American  ele- 
ment of  the  population  with  the  accession  of  Carranza;  it 
is  still  in  possession  of  this  element.  If  Carranza  could  have 
secured  the  American  Government's  approval  of  the  con- 
fiscation of  the  oil-bearing  subsoil  of  Mexico,  he  would  un- 
doubtedly have  leased  this  territory  to  German  interests,  or 
to  Japanese  or  English.  Certainly  American  citizens  would 
not  have  secured  much  of  this  territory.    If  the  American 

41 


Government  had  given  its  assent  to  the  above  interpretation 
of  Article  27,  it  could  not  have  objected  to  the  right  of 
Mexico  to  sell  its  resources  wherever  it  pleased.  The  Obre- 
gon  government  will  do  likewise  under  similar  circumstances. 
What  will  the  American  Government  do  then? 

3.  The  most  fruitful  source  of  conflict  between  Mexico 
and  the  American  Government  is  the  "concession."  As 
matters  have  been  in  the  past,  American  citizens  have  com- 
peted with  each  other  and  with  other  foreigners  on  terms  of 
equality  in  their  efforts  to  secure  leases  from  the  land  own- 
ers. If  the  Mexican  government  seizes  the  subsoil,  the  oil 
companies  of  all  countries  will  concentrate  their  energies 
to  dealing  with  the  Mexican  government,  and  Mexico  City 
will  be  the  seat  of  activities  of  the  agents  of  these  companies 
and  unscrupulous  concession  hunters.  It  is  easy  to  foresee 
the  corruption  that  would  result  and  the  charges  of  corrup- 
tion even  where  it  did  not  exist.  The  American  Government 
and  other  governments  will  be  called  upon  to  support  their 
citizens  in  concessions  which  on  their  face  are  legally  valid, 
but  which  are  unjust  in  substance,  with  the  result  that  this 
will  be  a  constant  source  of  friction  with  the  Mexican  gov- 
ernment. 

It  will  be  recalled  that  the  present  Minister  of  Finance,  de 
la  Huerta,  devoted  most  of  his  last  day  in  oflSce  as  President 
of  Mexico  to  the  signing  of  oil  concessions  in  favor  of  his 
frie'nds  and  associates.  These  concessions  covered  a  consid- 
erable portion  of  the  territory  of  Mexico  and  were  given  on 
terms  that  would  have  created  great  opposition  among  the 
Mexican  people,  if  they  had  been  negotiated.  That  these 
eleventh-hour  concessions  were  not  negotiated  is  due  to  the 
refusal,  so  far,  of  the  American  Government  to  recognize 
the  confiscatory  effects  of.  Article  27.  These  concessions  and 
others  like  them  will  be  taken  up  if  representatives  of  Amer- 
ican oil  interests  accept  a  settlement  along  the  lines  above 
suggested,  and  if  the  American  Government  approves  this 
settlement  by  recognition.  The  method  of  acquiring  oil 
territory  in  Mexico  then  will  be  to  apply  to  the  relatives  and 
friends  of  the  President  and  his  Cabinet.  These  applica- 
tions will  be  anticipated,  undoubtedly,  by  blanket  concessions 
to  favorites.  Under  such  circumstances  it  is  of  interest  to 
consider  what  the  attitude  of  the  American  Government 
would  be.    What  will  our  Government  do  when,  after  the 

42 


investment  of  millions  of  dollars  under  such  concessions,  a 
subsequent  Mexican  government  declares  them  to  be  void 
because  of  fraud  ? 


If  the  principle  of  non-retroactivity  is  really  and  fully 
applied  it  will  give  not  only  temporary  but  permanent  relief 
to  oil  companies,  and,  at  the  same  time,  will  safeguard  the  oil 
rights  of  other  American  citizens  who  own  land  in  Mexico. 
It  will  also  give  such  guarantees  to  Mexican  citizens  that 
the  oil  resources  of  Mexico  will  continue  to  be  open  to  de- 
velopment along  business  lines  and  in  strict  accord  with 
justice  and  law. 

This  is  the  only  just  and  permanent  solution  of  the  oil 
question.  , 


43 


AGREEMENT  OF  OIL  COMMITTEE  WITH 
OBREGON  GOVERNMENT 

(BULLETIN  No.  6— Issued  September  16,  1921) 

Two  salient  facts  stand  out  as  the  result  of  the  conference 
of  the  Committee  of  Five  of  the  Association  of  Producers  of 
Petroleum  in  Mexico  held  recently  with  officials  of  the  Obre- 
gon  government.  One  is  the  acceptance  of  a  total  tax  of 
more  than  100  per  cent  of  the  price  of  oil  at  the  well  and 
agreement  to  pay  taxes  in  the  future  greatly  in  excess  of 
imposts  against  which  the  companies  protested  as  con- 
fiscatory at  a  time  when  oil  brought  two  or  three  times  its 
present  price.  The  other  is  an  apparent  about-face  of  the 
companies  which  in  the  past  flatly  endorsed  the  requirements 
laid  down  by  Secretary  Hughes  as  essential  to  recognition 
of  the  Obregon  government. 

Though  neither  the  oil  committee  nor  the  Mexican  gov- 
ernment has  made  public  the  terms  of  the  agreement,  the 
American  Association  of  Mexico  learns  that  the  following 
are  the  outstanding  points: 

The  decree  of  June  7  last,  imposing  a  total  tax  of  ap- 
proximately thirty-eight  cents  American  money  a  barrel,  is 
suspended  until  December.  The  ad  valorem  tax  under  the 
previous  decree  of  May  24,  which  amounts  to  approximately 
twelve  cents  per  barrel,  is  allowed  to  stand  except  that  it 
becomes  a  production  tax  instead  of  an  export  tax.  This 
tax  is  therefore  paid  on  all  oil  in  storage  and  all  oil  sold 
within  Mexico.  The  companies  have  already  paid,  or  are  in 
the  process  of  paying,  this  tax.  Since  this  tax  is  based  on 
the  price  of  oil,  it  is  assumed  that  when  oil,  now  worth  at 
the  well  in  Mexico  about  fifteen  cents  a  barrel,  reaches  its 
normal  price  of  from  thirty  to  fifty  cents  a  barrel,  the  tax 
will  be  increased  proportionately.  In  addition  to  this  ex- 
orbitant tax,  an  export  tax  of  eight  cents  per  barrel  has 
been  agreed  upon.  The  total  oil  tax  is  therefore  now  twenty 
cents  American  money  per  barrel.  The  highest  tax  in  the 
United  States  is  levied  in  Oklahoma — 3  per  cent  of  the  value 
of  the  oil.  At  present,  the  Mexican  tax  is  forty  times  as 
great. 

This  agreement  merely  lasts  until  December  25  of  this 
year,  at  which  time  taxes  are  to  be  adjusted  and,  if  past 
procedure  be  adhered  to,  increased.     The  final  decision  in 

44 


this  matter  rests  with  the  Mexican  government.  One  effect 
o:f  the  settlement  is  that  oil  companies  have  for  the  first  time 
deviated  from  their  policy  of  paying  taxes  under  protest 
on  the  ground  that  they  were  confiscatory  and  collected 
under  duress,  and  have  now  accepted  this  tax  as  just.  This 
is  inferred  from  the  terms  of  the  agreement  and  is  further 
confirmed  by  Mr.  Teagle's  statement  to  the  effect  that  "we 
feel  the  adjustment  made  represented  concessions  on  both 
sides  and  was  all  that  could  be  desired  in  the  circumstances." 
When  the  price  of  oil  was  much  higher  than  it  is  today  and 
taxes  were  much  lower,  the  oil  companies  protested  to  the 
American  Government  and  the  American  people  that  such 
taxes  were  confiscatory. 

It  will  be  noted  that  the  large  corporations  represented 
by  this  committee  have  succeeded  in  shifting  a  part  of  the 
burden  of  taxation  to  the  small  producer.  Americans  of 
small  means,  who  do  not  control  pipe  line  outlets  to  the 
sea,  have  within  the  last  eight  months  invested  more  than 
four  million  dollars  in  the  drilling  of  wells.  These  men  are 
not  represented  in  the  Oil  Association  and  consequently 
have  had  no  voice  in  this  agreement.  Another  effect  of 
changing  the  major  part  of  the  tax  from  an  export  to  a 
production  tax  will  be  that  the  Mexican  government  will  not 
be  under  the  obligation  of  devoting  this  new  tax  to  the  pay- 
ment of  its  foreign  debt.  It  will  be  recalled  that  the  Obregon 
government  was  committed  to  this  policy.  On  June  13  last, 
the  Mexican  embassy  in  Washington  issued  the  following 
statement : 

"The  Mexican  embassy  has  been  authorized  to  offi- 
cially announce  that  the  President  of  the  Republic,  in 
a  decree  dated  the  12th  instant,  directed  the  Minister 
of  Finance  to  issue  the  necessary  order  to  the  effect 
that  beginning  the  1st  of  July  next,  the  sums  collected 
by  virtue  of  the  new  tax  on  petroleum  be  in  their  en- 
tirety deposited  in  the  Banco  Nacional  (National  Bank), 
said  sums  to  be  accumulated  at  the  above  mentioned 
banking  institution  in  order  that  they  may  be  fully 
applied  to  the  resumption  of  Mexico's  external  public 
debt.'.' 
The  American  oil  companies  moved  to  the  seat  of  the 
Mexican  government,  and  as  a  result  the  Mexican  govern- 
ment seems  to  have  dictated  a  compromise.    The  total  nomi- 
nal tax  (for  it  had  not  been  collected)  before  the  committee 

,     45 


went  to  Mexico  was  approximately  thirty-eight  cents  Amer- 
ican money  per  barrel,  which  we  are  justified  in  believing 
the  Mexican  government  had  no  real  hope  of  obtaining  in 
full.  The  government  probably  secured  from  this  manoeuvre 
a  far  greater  tax  than  it  anticipated  and  has  established  a 
basis  in  principle  for  such  taxes  as  it  may  desire  to  impose 
after  December.  In  the  meantime,  it  expects  recognition. 
The  basis  of  this  arrangement  consists  in  the  expectation 
of  the  Mexican  government  that  the  Oil  Association,  in  con- 
sideration for  this  temporary  concession,  will  change  its 
policy  and  advocate  recognition  of  the  Obregon  government 
by  the  American  government.  Every  move  that  the  Mexi- 
can government  is  making  now  is  directed  toward  recogni- 
tion. This  purpose  can  be  seen  in  every  statement,  every 
law,  every  decision  of  the  Supreme  Court. 

On  August  24,  the  day  the  oil  committee  started  for 
Mexico,  the  American  Association  of  Mexico  published  a 
warning  in  the  Associated  Press  and  addressed  a  memoran- 
dum to  the  Secretary  of  State  in  which  it  predicted  that: 

"If  through  the  efforts  of  this  formidable  committee 
the  oil  companies  should  be  able  to  force  a  compromise 
on  the  oil  tax,  every  effort  will  be  made  by  Mexico, 
through  her  active  propagandists,  to  have  such  a  settle- 
ment accepted  as  a  settlement  of  the  whole  Mexican 
question.     The  Obregon  government,  in  exchange  for 
special  concessions  to  the  oil  companies,  will  endeavor 
to  gain  the  cooperation  of  these  companies  in  securing 
recognition  without  doing  justice  to  other  American 
citizens." 
The  oil  committee  did  make  a  partial  settlement  of  the 
tax  question,  though  one  of  doubtful  value,  and  the  day  the 
committee  left  Mexico   City,   the   "Excelsior"  voiced   the 
opinion  of  the  Mexican  press  and  public  when  it  announced 
in  seven  column  headlines  that  "The  Difficulties  of  the  Oil 
Men  Have  Ended;  General  Obregon  Will  Be  Recognized  by 
the  United  States." 

Coincident  with  the  return  of  the  oil  committee  to  the 
United  States,  the  Associated  Press  carried  a  report  from 
Mexico  City  expressing  the  general  belief  in  Mexico  that,  as 
a  result  of  the  oil  conference,  "something  is  going  on  behind 
the  scenes  in  an  attempt  to  break  the  deadlock  (on  the  ques- 
tion of  recognition) ."  This  report  of  the  Associated  Press 
contained  the  following  statement: 

46 


"The  return  to  New  York  of  the  heads  of  the  five  oil 
companies  is  expected  here  to  result  shortly  in  the 
publication  of  the  detailed  terms  of  the  agreement  be- 
tween the  oil  men  and  the  Mexican  officials,  which  is 
construed  as  containing  elements  which  will  contribute 
to  a  speedy  clearing  up  of  the  international  situation. 
Local  newspapers  persist  in  expressions  of  the  belief 
that  something  more  than  taxes  was  talked  of  during 
the  week  of  oil  conferences,  and  that  the  heads  of  the 
American  companies  will  make  some  definite  recom- 
mendation to  the  State  Department  at  Washington." 
The  heading  placed  over  this  report  by  the  New  York 
Times  said :  "Mexico  Encouraged  Over  Recognition — Efforts 
Said  to  be  in  Progress  Behind  the  Scenes  to  Bring  About 
Accord — New  Basis  Is  Now  Sought — Believed  That  Heads 
of  Oil  Companies  Will  Make  Representations  to  Hughes." 

On  September  12,  the  International  News  Service  carried 
a  dispatch  from  Mexico  City  to  the  effect  that  an  agreement 
was  made  by  the  presidents  of  the  American  oil  companies 
to  float  a  loan  for  Mexico  and  also  that: 

"Mexican  newspapers,  in  commenting  today  upon  the 
international  situation,  said  they  expected  that  the  re- 
port of  the  American  oil  presidents  to  President  Harding 
and  Secretary  of  State  Hughes  will  change  Washing- 
ton's policy  toward  Mexico." 
These  news  reports  have  resulted  in  many  mistaken  edi- 
torial and  verbal  comments  to  the  effect  that  Mexico's  oil 
question  having  been  settled,  the  Obregon  government  doubt- 
less would  be  recognized. 

These  news  reports  and  comments  have  been  in  circula- 
tion in  Mexico  and  the  United  States  now  for  two  weeks  and 
the  oil  committee  has  allowed  them  to  go  unchallenged.  It 
is  clear  that  either  the  oil  committee's  agreement  with 
Mexico  does  contain  an  understanding  that  the  Oil  Associa- 
tion is  to  help  Obregon  secure  recognition  or  that  the  Asso- 
ciation thinks  it  has  something  to  gain  by  allowing  this  im- 
pression to  stand.  The  failure  to  deny  in  any  way  the  many 
statements  regarding  the  far-reaching  effects  of  the  oil  com- 
mittee's visit  is  creating  a  general  opinion  regarding  its  im- 
portance that  is  unjustified  and  is  placing  the  Oil  Associa- 
tion in  a  position  of  now  giving  support  to  a  situation  that 
in  every  formal  utterance  of  the  Association  since  last  Feb- 

47 


ruary  has  been  vigorously  attacked  as  unjust  and  illegal. 

The  Oil  Association,  so  sensitive  to  publicity,  in  failing  to 
correct  this  widely  spread  impression,  has  given  tacit  con- 
firmation to  the  version  of  the  Mexican  government.  This 
is  perhaps  one  reason  that  the  shroud  of  secrecy  has  been 
thrown  over  this  agreement.  The  Committee  of  Five  re- 
ported to  the  Oil  Association  last  Wednesday  that  this  agree- 
ment was  being  kept  secret  because  it  was  so  unfavorable 
to  the  Mexican  government  that  to  divulge  it  would  expose 
that  government  to  an  attack  by  the  radicals.  The  radicals 
must  be  hard  to  please  if  they  are  not  satisfied  with  a  tax 
of  twenty  cents  a  barrel  until  December,  any  tax  they  desire 
to  impose  thereafter,  and  (if  the  press  reports  be  correct) 
the  removal  of  one  great  obstacle  to  recognition,  the  opposi- 
tion of  the  large  oil  companies. 

While  the  oil  committee  was  in  Mexico,  the  Justices  of  the 
Supreme  Court,  by  the  finding  in  the  Texas  Company  case, 
forecast  a  decision  and  a  Congressional  Committee  recom- 
mended, that  Article  27  should  be  so  interpreted  as  to  save 
from  confiscation  leases  held  by  the  large  foreign  oil  com- 
panies on  May  1,  1917.  It  was  not  a  coincidence  that  these 
two  instruments  of  the  Mexican  executive  authority  should 
have  given  these  decisions  while  the  oil  committee  was  in 
Mexico.  Under  the  terms  of  the  court's  finding  only  that 
small  district  in  the  present  oil  field  held  by  large  oil  com- 
panies, from  which  most  of  the  oil  has  been  exhausted,  is 
saved  from  confiscation ;  all  the  rest  of  the  subsoil  of  Mexico, 
including  the  property  of  thousands  of  American  citizens, 
is  confiscated.  The  decision  refers  merely  to  oil  lands  and 
gives  relief  only  to  oil  companies.  It  does  not  in  any  way 
affect  those  provisions  of  Article  27  which  provide  for  the 
confiscation  of  American-owned  land  and  deprive  American 
citizens  of  the  right  to  purchase  land  in  the  Republic  of 
Mexico.  The  interpretation  given  to  this  decision  by  the 
Mexican  papers  and  the  New  York  papers  is  entirely  errone- 
ous, as  it  is  a  most  limited  application  of  the  principle  of 
non-retroactivity. 

The  present  conduct  of  the  Oil  Association  is  a  direct 
violation  of  its  previous  declaration  of  policy,  of  its  pledges 
to  other  organizations  interested  in  the  welfare  of  Amer- 
icans in  Mexico  and  its  pledges  to  high  officials  of  the  Amer- 
ican government.  On  March  3  last,  the  Oil  Association 
issued  a  statement  to  the  effect  that: 

48  


"The  oil  companies  know  from  experience  the  futility 
of  relying  upon  mere  verbal  assurances.  In  spite  of 
repeated  assurances  that  the  rights  of  American 
petroleum  producers  in  Mexico  would  be  respected,  their 
properties  have  been  for  four  years  and  still  are  men- 
aced by  the  threat  of  confiscation  contained  in  the  new 
Mexican  Constitution  and  the  Carranza  petroleum  de- 
crees. .  .  .  The  oil  companies  therefore  agree 
with  the  conclusions  of  the  Senate  Sub-committee  that 
we  have  the  legal  right  and  it  is  our  duty  to  refuse  to 
recognize  any  government  in  Mexico  until  it  has  given 
assurances  in  writing  that  the  lives  and  property  rights 
of  American  citizens  in  Mexico  would  be  respected  and 
protected.  The  oil  companies  also  realize,  as  any  one 
familiar  with  recent  and  present  conditions  in  Mexico 
must  understand,  that  the  particular  problem  of  the 
American  petroleum  producer  in  Mexico  can  not  be 
solved  satisfactorily  apart  from  the  entire  Mexican 
problem  as  it  affects  various  American  interests.  Any 
permanent  solution  of  the  particular  problems  con- 
fronting the  oil  companies  depends  upon  a  full  recog- 
nition of  the  principles  of  equity  and  international  law, 
the  violation  of  which  underlie  the  difficulties  not  only 
of  the  oil  companies,  but  of  all  other  Americans  inter- 
ested in  Mexico." 
The  following  resolution  was  passed  at  a  meeting  of  the 
Oil  Association  at  Galveston  on  March  17  last: 

"Basing  its  stand  on  the  fundamental  principles  of 
natural  justice,  and  sound  precepts  of  international  and 
constitutional  law,  the  Association  of  Producers  of 
Petroleum  in  Mexico  again  records  its  unalterable 
determination  to  maintain  rights  legitimately  acquired 
according  to  pre-existing  laws  of  Mexico  and  to  oppose 
the  confiscation  thereof,  threatened  or  already  actually 
accomplished,  under  executive  decrees  and  orders  based 
on  Art.  27  of  the  so-called  Constitution  of  Queretaro. 

"We  reiterate  our  conviction  that  the  present  Mex- 
ican constitution  was  irregularly  and  illegally  adopted 
and  that,  in  any  event,  no  interpretation  of  that  con- 
stitution which  does  not  limit  the  application  of  Art. 
27  to  the  vacant  and  national  lands  as  they  existed  on 
May  1,  1917,  and  so  preserve  to  all  private  owners  and 

49 


lessees  of  Mexican  lands  on  that  date  complete  enjoy- 
ment of  petroleum  subsoil  rights,  is  consistent  either 
with  the  rules  of  legal  construction,  or  with  principles 
of  national  or  international  justice." 

The  above  represented  the  uncompromising  attitude  of 
the  oil  companies  before  they  secured  temporary  relief  for 
themselves.  In  the  absence  of  any  unequivocal  declaration 
from  the  Oil  Association,  Americans  are  justified  in  assum- 
ing that  the  Mexican  government  and  press  and  the  Amer- 
ican press  are  correct  in  representing  that  the  Oil  Associa- 
tion has  changed  its  program  and  is  now  numbered  among 
the  advocates  of  recognition  of  the  Obregon  government. 

For  some  mysterious  reason,  for  thirty  days  after  the 
receipt  of  a  letter  from  Senator  A.  B.  Fall,  who  had  been 
requested  to  outline  a  proper  Mexican  policy,  the  Associa- 
tion of  Producers  of  Petroleum  in  Mexico  failed  to  make 
public  endorsement  of  this  policy,  either  directly  or  through 
its  associated  organization,  the  National  Association  for  the 
Protection  of  American  Rights  in  Mexico.  The  question 
was  then  raised :  Were  the  Mexico  City  agents  of  the  vari- 
ous oil  companies  negotiating  at  the  time  with  the  Obregon 
government,  and  promising  to  secure  recognition  for  it  if 
that  government  would  refrain  from  piling  up  oil  taxes? 
It  is  certain,  at  least,  that  the  delayed  public  endorsement 
of  the  Fall  policy  by  the  Oil  Association  and  the  National 
Association  was  soon  followed  by  promulgation  by  the 
Obregon  government  of  new  and  burdensome  oil  tax  decrees. 

Does  a  similar  situation  exist  today? 

The  silence  of  the  Committee  of  Five  in  the  face  of  the 
many  newspaper  reports  that,  as  a  result  of  the  tax  com- 
promise, recognition  would  be  accorded  Obregon,  brings  up 
a  similar  question:  Was  there  explicit  or  implied  promise 
that  in  return  for  the  tax  compromise  the  oil  producers 
would  lend  their  influence  to  securing  for  Obregon  recog- 
nition of  his  government  by  the  United  States?  If  not, 
why  have  the  oil  companies  failed  to  deny  the  repeated 
public  announcements  that,  as  a  result  of  their  committee's 
efforts  and  the  Supreme  Court  decision,  the  Mexican  prob- 
lem has  been  settled  and  recognition  is  near  / 

Can  it  be  possible  that  a  policy  is  being  pursued  of  advo- 
cating recognition  at  Mexico  City  while  opposing  it  at 
Washington  ? 

50 


RESULT  OF  THE  OIL  COMMITTEE'S  VISIT  TO 
MEXICO  CITY 

(Supplementary  to  Bulletin  No.  6) 

(BULLETIN  No.   ?— Issued  Beptcmher  24,  1921) 

The  American  Association  of  Mexico,  in  its  discussion  of 
the  Mexican  question,  has  consistently  opposed  half-way 
measures  and  make-shift  compromises  in  the  belief,  estab- 
lished by  long  experience  and  the  evidence  of  many  futile 
experiments,  that  the  whole  problem  could  be  solved  as 
readily  as  any  part  of  it.  And  this  Association  has  urged 
since  the  day  of  its  organization  that  the  differences 
between  Mexico  and  the  United  States  be  adjusted  definitely 
and  completely  by  the  two  governments  as  the  only  course 
offering  assurance  of  a  permanent  remedy. 

Our  opposition  to  the  recent  visit  to  Mexico  City  of  the 
committee  of  the  Association  of  Producers  of  Petroleum  in 
Mexico  was  based  upon  the  belief  that  undue  importance 
would  be  given  in  both  countries  to  but  a  single  point  of 
one  of  the  many  questions  at  issue.  Our  fears  have  been 
more  than  justified.  Many  newspapers  and  individuals  in 
both  countries  have  attributed  exaggerated  scope  and  im- 
portance to  the  mission  of  the  committee.  This  committee 
of  big  business  men  went  to  Mexico  to  discuss,  according  to 
their  own  announcement,  excessive  taxes  with  the  Obregon 
government.  Upon  the  strength  of  a  hastily  arranged  and 
still  incomplete  agreement  with  regard  to  a  readjustment 
of  export  duties,  oil  shipments  from  Mexico  have  been 
ordered  resumed  and  large  payments  have  been  turned  into 
the  Mexican  treasury. 

The  Mexican  question  as  a  whole,  therefore,  is  just  where 
it  was  before  the  American  oil  companies  suspended  expor- 
tation of  oil  July  1,  with  the  added  disadvantage  placed 
upon  all  interests  other  than  oil,  of  having  to  explain  and 
convince  anew  those  who  are  not  well  informed  about  Mex- 
ico, that  nothing  has  been  settled  permanently  by  the  trip 
of  the  Oil  Association's  committee,  not  even  the  oil  question. 

The  prediction  of  the  American  Association  that  the 
Mexican  propagandists  at  home  and  abroad  would  fasten 
upon  any  kind  of  minor  agreement  with  the  imposing  oil 

51 


committee  and  give  it  undue  importance,  was  promptly  ful- 
filled. Before  the  terms  of  the  agreement  on  this  phase  of 
the  oil  question  were  fully  known,  optimistic  reports  were 
launched  that  the  Mexican  question  had  been  settled  and 
prospects,  consequently,  were  bright  for  an  early  recogni- 
tion of  the  Obregon  government. 

The  advantage  to  be  secured  in  the  compromise  arranged 
on  the  oil  export  tax  is  considered  of  doubtful  value  by  oil 
men  themselves,  and,  even  if  the  committee  had  secured 
the  absolute  abrogation  of  the  new  tax,  the  oil  question 
would  be  just  where  it  was  before.  Neither  the  oil  ques- 
tion nor  the  Mexican  question  in  their  larger  aspects  would 
be  in  any  way  altered.  It  is  to  be  noted  that  the  Oil  Asso- 
ciation has  not  denied  the  press  reports  that  the  oil  ques- 
tion has  been  settled ;  has  not  denied  the  reports  that  Article 
27  has  been  satisfactorily  eliminated;  has  not  denied  the 
reports  that  the  Oil  Association  would  advocate  recognition. 

The  recent  statements  of  the  justices  of  the  Mexican 
Supreme  Court  in  the  case  of  the  Texas  Company  have  also 
been  generally  hailed  as  an  interpretation  of  Article  27  and 
a  judgment  of  the  highest  tribunal  that  the  famous  confis- 
catory article  of  the  Mexican  Constitution  was  not  to  have 
retroactive  effect.  The  fact  is  that  no  decision  has  yet  been 
made  in  this  case  and  the  manner  in  which  the  truth  has 
been  distorted  for  publicity  purposes  furnishes  a  good  exam- 
ple of  Obregon  recognition  propaganda.  The  justices  of  the 
Supreme  Court  in  a  public  hearing  merely  gave  their  indi- 
vidual verbal  opinions  and,  we  are  reliably  informed,  the 
members  of  the  Obregon  cabinet  are  now  engaged  in  a 
controversy  as  to  the  nature  of  the  decision  yet  to  be  written 
by  the  Supreme  Court. 

The  essential  facts  of  the  situation  can  be  set  forth  in 
very  few  words.  Article  27  of  the  so-called  Constitution  of 
1917  provides  that  the  oil-bearing  subsoil  of  all  lands  in 
Mexico  shall  be  nationalized  (confiscated)  as  of  May  1,  1917. 
It  is  contended,  and  we  understand  this  to  be  the  position 
of  the  American  government,  that  the  provision  may  legally 
apply  only  to  such  land  as  on  that  date  belonged  to  the 
Mexican  government  and,  consequently,  it  could  not  apply 
to  land  the  title  to,  which  had  vested  in  individuals  prior 
thereto;  that  to  construe  this  article  otherwise  would  give 

52 


it  a  retroactive  effect  equivalent  to  confiscation.  The  fore- 
going is  the  interpretation  for  which  the  American  Asso- 
ciation has  stood  from  the  beginning,  in  the  belief  that  it 
is  the  only  just  and  reasonable  construction  which  can  be 
placed  upon  Article  27.  It  was  the  contention  of  the  Oil 
Association  last  March.  On  the  other  hand,  the  Carranza 
government  contended  and  the  Obregon  government  now 
holds  that  the  Mexican  government,  under  the  Constitution 
of  1917,  has  the  right  to  expropriate  without  compensation 
(to  confiscate)  private  property.  This  is  the  big  issue  in- 
volved with  respect  to  the  retroactive  effect  of  Article  27: 
Does  this  article  apply  only  to  national  lands  or  do  private 
lands  also  come  within  its  provisions? 

We  shall  see  now  whether  this  issue  has  been  decided.  In 
a  contract  executed  before  May  1,  1917,  the  Texas  Company 
leased  a  parcel  of  land  from  an  individual.  Subsequent  to 
that  date,  the  Carranza  government  gave  title  to  a  third 
party  who  made  application  for  it  under  the  provisions 
of  Article  27.  The  Texas  Company  appealed  to  the  Mexican 
courts,  and  the  case  finally  reached  the  Supreme  Court.  The 
Carranza  government  and  later  the  Obregon  government 
contended  that  the  subsoil  of  this  particular  lot,  under  the 
terms  of  Article  27,  belonged  to  the  government,  and  not 
to  the  Texas  Company  and  that,  consequently,  the  govern- 
ment could  give  title.  The  Texas  Company  alleged  (1)  that 
Article  27  could  not  be  interpreted  retroactively  as  applying 
to  this  lot  because  the  company  had  leased  it  prior  to  May 
1,  1917,  and  (2)  that  even  if  Article  27  could  be  so  con- 
strued, the  government  might  not  extend  title  to  a  third 
party  because  it  (the  Texas  Company)  had  spent  money 
in  developing  the  property  and  thus  saved  it  from  the  appli- 
cation of  Article  27  under  a  Carranza  decree  which  pro- 
vided that  a  denouncement  title  (patent)  might  not  be  given 
by  the  government  to  a  third  party  where  the  original 
lessee  had  spent  money  on  the  land  in  exploring  for  oil. 
It  is  clear,  therefore,  that"  only  the  Texas  Company  case 
was  involved  and  that,  even  if  the  decision  were  made  on 
the  first  ground,  and  were  made  applicable  to  all  similar 
cases,  by  no  stretch  of  construction  could  this  decision  apply 
to  any  land  outside  of  that  already  leased  on  May  1,  1917. 
It  could  not  apply  to  land  owned  in  fee,  and  consequently, 
would  not  protect  the  unleased  land  owned  by  thousands  of 

53 


American  citizens.  This  decision  could  not  possibly  affect 
any  land  outside  of  that  strip  in  the  Tampico  oil  field  some 
forty  miles  in  width  by  some  one  hundred  miles  in  length 
leased  to  foreign  oil  companies.  All  the  rest  of  the  subsoil 
of  Mexico  remains  confiscated  under  the  contention  of  the 
Mexican  government.  The  interpretations  given  the  so- 
called  decision  in  the  Texas  Company  case  serve  to  demon- 
strate how  the  truth  may  be  twisted  and  how  propagandists 
have  deceived  the  American  press. 

This  is  particularly  the  case  with  legal  matters,  due  to 
the  striking  difference  between  American  and  Mexican 
procedure  and  methods.  In  Mexican  jurisprudence  prece- 
dent is  not  binding  on  the  courts.  Even  a  superficial  study 
of  Mexican  law  shows  how  very  careful  the  lawmakers  of 
the  country  have  been  to  prevent  the  establishment  of 
precedents,  and  to  make  it  compulsory  upon  the  courts  to 
consider  each  cause  upon  its  special  merits  and  not  in  the 
light  of  decisions  in  similar  cases. 

In  amparo  proceedings,  such  as  the  Texas  Company  case, 
the  court  is  specifically  inhibited  from  making  any  general 
•statement  with  regard  to  the  law  or  the  act  upon  which 
complaint  is  based.  The  new  law  of  amparo  regulative  of 
Articles  103  and  104  of  the  Constitution  of  1917,  promul- 
gated by  decree  of  October  18,  1919  says  in  Article  2,  Title 
1,  Chapter  1: 

"The  forms  and  procedure  laid  down  in  this  law  shall 
be  observed  in  amparo  proceedings  and  the  judgment 
shall  always  be  so  drawn  as  to  affect  exclusively  private 
individuals  and  shall  confine  itself  to  affording  redress 
in  the  special  case  to  which  the  complaint  refers ;  BUT 
IT  SHALL  MAKE  NO  GENERAL  STATEMENT  AS 
TO  THE  LAW  OR  ACT  THAT  MAY  HAVE  FORMED 
THE  BASIS  OF  THE  COMPLAINT." 
Of  what  value  as  a  precedent  is  a  decision  of  the  Supreme 
Court  of  Mexico  in  an  amparo  proceeding?     Articles  148, 
149  and  150,  Title  11,  Chapter  11  of  the  law  just  cited  dem- 
onstrate clearly  that  it  has  none  whatever.     An  isolated 
decision  of  the  Supreme  Court  may  be  disregarded  by  in- 
ferior courts,  whether  federal,  state  or  territorial.    Article 
148  provides  that  a  judgment  of  the  Supreme  Court  shall 
become  a  part  of  the  jurisprudence  of  the  country  only  after 
the  court  has  handed  down  "five  successive  judgments,  the 

54 


succession  being  unbroken  by  any  contrary  judgment." 
Then,  and  then  only,  does  the  judgment  become  "binding 
upon  the  Circuit  and  District  courts  and  the  State,  Federal 
District  and  Territorial  tribunals."  (Art.  149.)  This  same 
article  further  provides  that  the  Supreme  Court  shall  have 
authority  to  reverse  its  own  "established  judgments"  but 
in  so  doing  must  present  reasons  for  its  action  which  shall 
deal  with  the  grounds  upon  which  the  judgment  originally 
was  affirmed. 

Article  150  provides  that  when  a  party  to  an  amparo 
proceeding  or  appeal  invokes  an  "established  judgment"  of 
the  court  in  support  of  his  cause,  the  court  shall  give  due 
consideration  to  the  judgment  invoked  and  in  rendering  a 
decision  in  the  case  at  bar  "shall  set  forth  the  court's  rea- 
sons or  motives  for  SUSTAINING  OR  REVERSING  the 
judgment  cited." 

The  Supreme  Court  of  Mexico  has  handed  down  many 
judgments  denying  amparo  in  connection  with  Article  27 
of  the  constitution.  Now,  in  the  Texas  Company  case,  the 
court  reverses  its  action.  It  may  complete  the  cycle  of 
five  and  in  such  case  the  judgment  will  become  "estab- 
lished." But,  since  precedent  has  virtually  no  standing  in 
Mexican  jurisprudence,  nothing  could  hinder  the  Supreme 
Court  from  making  a  contrary  decision;  for  example,  the 
day  after  Mexico  had  obtained  recognition  from  the  United 
States,  and  reverting  to  its  decisions  of  1917  and  1918,  in 
which  it  was  held  that  there  is  nothing  in  the  Mexican  con- 
stitution of  1917  incompatible  with  laws  having  retroactive 
effect. 

The  court's  decision  is  merely  a  part  of  the  campaign  of 
the  Mexican  executive  to  secure  American  recognition. 
Obregon's  Supreme  Court  decides  this  point  in  favor  of  the 
oil  companies  because  thereby  Obregon  hopes  to  secure 
recognition,  whereas  Carranza's  Supreme  Court  decided 
identically  the  same  point  in  a  contrary  sense  because 
Carranza  already  had  recognition.  The  actual  affect  of 
this  decision  is  as  follows:  The  property  of  the  oil  com- 
panies will  not  be  confiscated  for  otherwise  the  oil  com- 
panies might  continue  their  anti-recognition  propaganda. 
The  property  of  all  Mexican  land  owners  is  confiscated,  as 
there  is  no  one  to  protect  them.  The  property  of  American 
citizens  owning  land  in  fee  is  confiscated  because  the  ma- 
ss 


jority  of  these  owners  are  poor  men,  who,  Mexico  feels, 
cannot  reach  the  ear  of  their  government. 

The  warning  given  in  our  Bulletin  No.  5  that  a  decision 
of  such  limited  application  could  not  in  any  sense  be  con- 
sidered a  general  remedy  is  well  grounded.  The  older  com- 
panies operating  in  Mexico,  who  secured  their  holdings 
some  five  or  more  years  ago,  will  find  a  measure  of  partial 
relief  in  the  Texas  Company  ruling.  For  the  great  majority 
of  private  landowners,  for  those  who  have  acquired  prop- 
erties in  recent  years,  and  for  future  operations,  it  indicates 
that  the  oil  development  of  Mexico  will  fall  under  the  blight- 
ing influence  of  absolute  government  domination. 

The  concerted  effort  to  have  the  non-retroactive  effect  of 
the  new  Mexican  Constitution  restricted  to  certain  oil  leases 
made  before  May  1,  1917,  is  not  confined  to  Mexico's  active 
propagandists  at  home  and  abroad.  Almost  simultaneously 
with  the  decision  of  the  Supreme  Court,  in  the  Texas  Com- 
pany case,  the  Petroleum  Commission  of  the  Chamber  of 
Deputies  made  a  report  which  follows  exactly  the  lines  laid 
down  by  the  justices  of  the  Supreme  Court.  This  is  the 
sop  the  Mexican  government  is  willing  to  throw  to  the  oil 
companies  in  order  that  all  private  holdings  and  all  future 
oil  development  of  every  kind  may  be  placed  under  govern- 
ment control. 

In  our  last  bulletin,  we  stated  that  the  oil  companies  had 
not  seen  fit  to  deny  the  reports  that  the  oil  question  has 
been  satisfactorily  settled,  that  the  so-called  decision  of  the 
Supreme  Court  had  now  eliminated  Article  27,  and  that 
these  companies  were  now  advocating  the  recognition  of  the 
Obregon  government.  The  oil  companies,  always  so  ready 
to  give  their  side  of  any  controversy  to  the  press,  still 
remain  silent.  This  attitude  is  persevered  in,  notwithstand- 
ing the  resolution  of  March  17  last  to  the  effect  that: 

"We  reiterate  our  conviction  that  the  present  Mex- 
ican Constitution  was  irregularly  and  illegally  adopted 
and  that,  in  any  event,  no  interpretation  of  that  con- 
stitution which  does  not  limit  the  application  of  Article 
27  to  the  vacant  and  national  lands  as  they  existed  on 
May  1,  1917,  and  so  preserve  to  all  private  owners  and 
lessees  of  Mexican  lands  on  that  date  complete  enjoy- 
ment of  petroleum  subsoil  rights  is  consistent  either 

56 


with  the  rules  of  legal  construction,  or  with  the  prin- 
ciples of  national  or  international  justice." 

Again  we  ask:  Have  the  oil  companies  changed  their 
policy  ? 

Objection  to  the  spirit  and  manner  of  the  visit  of  the 
Oil  Association's  committee  to  Mexico  is  not  captious  criti- 
cism on  the  part  of  the  American  Association.  The  Oil 
Association  is  on  record  as  acknowledging  the  necessity  of 
settling  the  entire  Mexican  problem  and  specifically  stating 
that  the  oil  producers'  troubles  cannot  be  settled  perma- 
nently and  satisfactorily  apart  from  those  of  all  other 
Americans  interested  in  Mexico.  On  July  1,  the  oil  pro- 
ducers suspended  exports  and  restricted  development  work 
in  Mexico  in  protest  against  an  unjust  and  confiscatory  tax. 
The  companies  should  have  known  at  that  time  what  the 
consequences  of  this  embargo  would  be. 

It  was  with  surprise  and  indignation,  therefore,  that 
those  whose  Mexican  interests  are  not  in  oil,  and  who  have 
long  been  laboring  to  secure  an  adjustment  of  the  whole 
Mexican  situation  which  would  relieve  oil  interests  equally 
with  others,  saw  the  oil  committee  suddenly  depart  for 
Mexico,  not  only  without  consultation  with  other  interests, 
but  without  even  general  conference  among  the  oil  com- 
panies themselves,  to  negotiate  a  partial  and  selfish  settle- 
ment that  must  inevitably  react  against  all  other  interests. 
It  has  placed  those  outside  the  oil  group  in  a  most  unfavor- 
able position  and  has  greatly  delayed  the  complete  adjust- 
ment of  Mexican  problems  that  alone  can  give  real  and 
permanent  security  to  all. 

If  objection  be  made  to  the  use  of  firm,  methods  in  deal- 
ing with  the  Mexican  government,  it  must  be  considered  that 
what  American  interests  in  Mexico  and  what  the  American 
government  are  asking  are  not  onerous  and  unjust  conces- 
sions from  Mexico,  but  simple  justice  and  restoration  of 
rights.  There  is  nothing  harsh  and  unusual  in  the  guaran- 
tees and  safeguards  that  are  asked  of  Mexico.  In  the  light 
of  the  violated  assurances  the  demands  are  amply  justified. 
And  in  standing  out  for  a  fair  written  agreement,  the  posi- 
tion of  the  American  Association  is  in  accord  with  the  judg- 
ment of  both  the  present  and  previous  administration  at 
Washington. 

The  visit  of  the  committee  caused  a  suspension  of  all 

57 


efforts  along  the  line  of  a  general  settlement.  The  com- 
mittee made  the  preliminary  arrangements  for  a  partial 
agreement  on  the  oil  question  as  it  affects  the  big  com- 
panies, but  at  what  cost?  Obrfgon's  arrogant  attitude  has 
been  strengthened  by  large  cash  payments,  while  his  self- 
importance  has  been  magnified  until  it  will  now  be  impos- 
sible to  negotiate  with  him  and  his  satellites  for  some  time 
to  come  on  any  basis  of  reason  and  common  sense.  It  also 
remains  to  be  seen  whether  the  visit  of  the  oil  committee 
to  Mexico  has  changed  the  attitude  of  the  oil  companies 
toward  the  recognition  of  Obregon. 

The  fundamental  objection  to  their  action  is,  that,  as  in 
all  negotiations  heretofore  between  the  oil  companies  and 
the  Mexican  government,  the  oil  companies  have  gained  a 
temporary  advantage  in  money  by  yielding  in  principle.  On 
the  contrary,  it  has  been  the  consistent  policy  of  the  Mex- 
ican government  to  purchase  permanent  advantage  at  the 
price  of  temporary  concession.  The  result  is  plainly  seen 
in  the  excessive  taxation  of  today. 

On  the  whole,  the  visit  of  the  oil  committee  has  resulted, 
as  it  was  easy  to  foresee,  in  much  positive  harm  to  the 
cause  of  a  general  settlement  of  the  Mexican  question,  while 
only  temporary  and  very  questionable  benefits  have  been 
secured  for  the  oil  companies  themselves.  It  is  evident  that 
those  who  are  interested  in  seeing  the  international  rela- 
tions between  Mexico  and  the  United  States  permanently 
adjusted  for  the  best  interests  of  all  concerned  must  not 
count  upon  the  co-operation  of  the  great  oil  companies,  for 
their  pledges  of  support,  when  withdrawn  at  the  most  crit- 
ical period  of  negotiation,  become  not  only  detrimental  to 
the  common  cause,  but  such  action  accords  to  misguided 
Mexican  authorities  moral  and  financial  assistance  that  is 
most  prejudicial. 

The  American  Association  is  confident  that  the  govern- 
ment at  Washington  is  not  misled  by  the  inevitable  hurrah 
of  propaganda  following  the  oil  committee's  trip  to  Mexico. 

Definite  announcement  has  been  made  that  a  represen- 
tative of  the  International  Committee  of  Bankers  will  go 
to  Mexico  to  discuss  financial  matters  with  the  Obregon 
government.  Similar  visits  to  Mexico  to  secure  considera- 
tion for  their  respective  interests  have  just  been  made,  or 
are  in  progress,  by  influential  agents,  not  only  of  the  big 

58 


American  oil  companies  but  also  of  the  locomotive  and 
steel  interests.  In  view  of  the  pending  negotiations  of  the 
Department  of  State  looking  to  an  equitable  settlement  of 
the  entire  Mexican  question  in  a  manner  that  would  pro- 
tect the  interests  of  thousands  of  individual  Americans  and 
small  investors,  just  concern  is  felt  because  of  the  probably 
harmful  effect  upon  the  cause  of  the  unrepresented  majority 
resulting  from  the  partial  settlements  being  arranged  by 
these  great  and  wealthy  groups.  The  former  have  no  voice 
and  are  not  being  considered,  while  the  representatives  of 
the  business  organizations  are  adjusting  their  own  specific 
problems. 

The  American  Association  was  organized  last  January 
when  the  Oil  Association  would  not  consent  to  the  National 
Association  for  the  Protection  of  American  Rights  in  Mex- 
ico making  public  endorsement  of  a  letter  from  Senator 
A.  B.  Fall  outlining  his  policy  in  the  Mexican  situation.  The 
National  Association  had  approved  this  letter  but  was  not 
allowed  to  publish  it.  At  that  time  the  Oil  Association  was 
suspected  of  "Playing  with  the  hare  and  running  with  the 
hounds."  It  was  privately  urging  Washington  not  to  recog- 
nize Obregon.  What  the  agents  of  the  company  were  doing 
in  Mexico  City  can  be  inferred  from  the  belief  of  the  Obre- 
gon government  that  the  oil  companies  were  advocating 
recognition. 

The  National  Association  originally  was  organized  by 
representatives  of  all  the  larger  interests  in  Mexico,  but, 
unfortunately,  owing  to  the  fact  that  for  financial  support 
it  was  soon  forced  to  depend  solely  upon  the  oil  companies, 
it  fell  under  the  domination  of  the  oil  interests.  Even  the 
separate  ofl!ices  of  the  National  Association  were  abandoned 
and  it  was  installed  as  an  adjunct  of  the  Oil  Association 
where  it  is  used  to  plead  the  cause  of  oil  under  the  guise 
of  interest  in  the  rights  of  Americans  in  general.  When 
the  rights  of  the  oil  companies  are  affected,  the  National 
Association  fights  boldly;  when  the  oil  companies  see  a 
chance  to  get  something  for  themselves  by  negotiation,  the 
National  Association  remains  quiescent.  It  is  for  this  rea- 
son that  the  National  Association  cannot  be  depended  upon 
to  look  after  the  interests  of  all  Americans,  so  that  in  a 
crisis  such  as  the  present  the  American  Association  has  to 
carry  on  without  organized  assistance. 

59 


The  American  Association  addressed  the  following  letter 
to  the  National  Association  on  the  16th  instant: 

"When  it  was  announced  that  the  Committee  of  Five  of 
the  Oil  Association  would  go  to  Mexico  City  for  the  pur- 
pose of  attempting  to  adjust  tax  troubles  with  the  Obregon 
government,  the  American  Association  of  Mexico  addressed 
a  letter  to  your  Association  in  which  it  asked  if  you  ap- 
proved of  this  Committee  going  to  Mexico,  if  you  did  not 
think  that  the  result  would  be  detrimental  to  American 
interests  in  that  country,  and  if  you  would  not  join  the 
American  Association  in  a  public  statement  of  disapproval. 
In  your  long  reply  you  did  not  answer  these  questions. 

"On  September  8th  this  Association  directed  another 
letter  to  your  Association  from  which  we  quote  the  follow- 
ing: 

'An  authoritative  statement  should  be  issued  within 
the  next  few  days,  in  our  opinion,  with  respect  to  the 
negotiations  between  the  Committee  of  Five  and  the 
Mexican  Government.     We  believe  that  the  National 
Association,  because  of  its  professed  interest  in  the 
welfare  of  all  Americans  in  Mexico  and  also  because  of 
its  intimate  relations  with  the  Oil  Association  and  the 
oil  companies,  should  issue  this  statement.     I  am  sure 
the  press  would  be  glad  to  use  it  and  that  it  would 
have  the  effect  of  defining  once  for  all  the  situation 
resulting  from  these  conferences.    If  the  National  Asso- 
ciation does  not  wish  to  issue  a  statement,  the  Amer- 
ican Association  will  probably  do  so  within  the  next 
few  days.    If  you  decide  not  to  make  a  statement,  will 
you  be  good  enough  to  write  me  and  give  the  National 
Association's  version  of  these  conferences.     Needless 
to  say,  we  shall  not  quote  the  Association  if  you  do 
not  wish  it  quoted.' 
"We  concluded  by  stating  that  'this  situation  cannot  be 
allowed  to  stand  and  the  American  Association  is  deter- 
mined that  it  shall  be  defined  in  the  very  near  future  and 
will  appreciate  the  co-operation  of  the  National  Association 
in  this  respect.'    The  American  Association  has  in  no  sense 
abandoned  this  purpose,  and  so  far  we  have  received  no 
co-operation  from  the  National  Association. 

"No  reply  has  been  received  to  the  above  letter,  and  in 

60 


an  informal  conference  with  several  of  your  directors  on 
the  14th  inst.,  the  latter  were  of  the  opinion  that  the 
National  Association  should  not  intervene  in  this  matter 
as  an  association.  We  should  now  like  to  have  your  definite 
reply  to  the  following  questions,  with  the  understanding 
that  we  shall  publish  the  substance  and  possibly  the  letter 
of  this  correspondence: 

"1.  Does  not  the  National  Association  think  that  the 
visit  to  Mexico  of  the  oil  committee  has  had  an  adverse 
effect  on  American  interests  in  that  country? 

"2.  Does  not  the  National  Association  believe  that  the 
Mexican  government  expects  in  return  for  such  concessions 
as  may  have  been  given  the  oil  people,  that  the  latter  will 
now  work  for  recognition  by  the  American  government 
instead  of  opposing  it? 

"3.  Does  not  the  National  Association  think  that  in  view 
of  press  reports,  both  Mexican  and  American,  the  American 
people  and  the  Mexican  people  are  justified  in  thinking  that 
the  oil  companies  and  the  Oil  Association  are  now  com- 
mitted to  work  for  recognition? 

"4.  Does  not  the  National  Association  consider  that  by 
refraining  from  denying  these  universal  reports  the  Oil 
Association  is  violating  the  spirit  of  its  announcements, 
on  the  3rd  and  17th  of  last  March,  to  the  effect  that  it 
would  oppose  recognition  until  the  rights  of  all  American 
citizens  were  taken  care  of? 

"5.  Will  not  the  National  Association  address  the  Oil 
Association  and  advise  the  latter  that  it  is  of  the  opinion 
that  it  should  issue  an  unequivocal  statement  of  its  posi- 
tion, first,  with  respect  to  whether  it  considers  the  recent 
Supreme  Court  ruling  as  settling  the  oil  question;  second, 
as  to  whether  it  regards  this  ruling  as  solving  the  difficul- 
ties of  Americans  under  Article  27 ;  third,  as  to  whether  it 
is  of  the  opinion  that  the  American  government  should 
accord  recognition  to  the  Obregon  government? 

"I  am  enclosing  herewith  copy  of  Bulletin  No.  6  which 
defines  the  attitude  of  the  American  Association  of  Mex- 
ico with  respect  to  the  above  matter. 

"We  should  like  to  hear  from  you  at  your  early  con- 
venience." 

The  National  Association  has  not  replied  to  this  letter, 

61 


but  we  learn  authoritatively  that  at  a  meeting  of  the  direc- 
tors of  the  Association,  they  did  not  decide  to  request  the 
Oil  Association  to  make  public  its  attitude  on  the  Mexican 
question,  and,  of  course,  did  not  decide  to  publish  a  con- 
demnation of  the  conduct  of  the  Oil  Association  in  failing 
to  make  its  position  clear  at  this  critical  juncture. 

Finally,  convinced  that  no  co-operation  could  be  secured 
from  the  National  Association,  which  because  of  its  rela- 
tions with  the  Oil  Association  should  have  made  this 
request,  the  American  Association  on  September  22 
addressed  the  following  letter  to  the  Oil  Association: 

"A  few  days  ago  I  sent  you  an  advance  copy  of  Bulletin 
No.  6  of  the  American  Association  of  Mexico  which  dealt 
with  the  effects  of  the  recent  negotiations  of  the  Committee 
of  your  Association  with  the  Obregon  government.  In  it 
reference  was  made  to  the  universal  impression  that  your 
Association  now  favors  the  recognition  of  the  Obregon  gov- 
ernment by  the  American  government.  In  view  of  the 
continued  silence  of  the  Oil  Association  on  this  subject,  the 
American  Association  of  Mexico,  an  organization  devoted 
to  the  interests  of  all  American  citizens  in  that  country, 
cannot  allow  this  situation  to  continue  undefined  without 
taking  up  this  matter  directly  with  your  Association. 

"The  Oil  Association  has  gone  on  record  to  the  effect: 

(1)  That  it  would  not  regard  the  Mexican  Oil  controversy 
as  being  settled  until, 

(a)  The  Mexican  government  agreed  that  Article  27 
of  the  so-called  Constitution  of  1917  should  apply  only 
to  lands  which  on  May  1,  1917,  belonged  to  the  Mexican 
government. 

(b)  The  Mexican  government  should  agree  to  a 
scheme  of  oil  taxation  which  was  not  confiscatory.  At 
the  time  these  statements  were  made  your  Association 
regarding  the  existing  tax  of  approximately  twelve 
cents  a  barrel  to  be  confiscatory. 

(2)  That  your  Association  would  oppose  the  recognition 
of  the  Obregon  government  by  the  American  government 
until  the  claims  of  all  American  citizens  were  adjusted  and 
their  rights  in  the  future  assured,  and  the  interests  of  the 
American  people  secured,   as   outlined   in   a  letter  dated 

62 


January  19, 1921,  by  Senator  A.  B.  Fall  to  the  National  Asso- 
ciation for  the  Protection  of  American  Rights  in  Mexico. 
"We  now  ask  you: 

1.  Do  you  consider  that  the  Obregon  government  has 
agreed  that  Article  27  shall  apply  only  to  lands  which 
belonged  to  the  Mexican  government  on  May  1,  1917? 

2.  Do  you  regard  the  present  oil  tax  as  just  or  satis- 
factory ? 

3.  Do  you  consider  that  the  questions  between  American 
citizens  and  the  Mexican  government,  and  the  controversy 
between  the  American  government  and  the  Mexican  gov- 
ernment, have  been  satisfactorily  adjusted? 

4.  Does  the  Oil  Association  now  favor  the  recognition 
of  the  Obregon  government  by  the  American  government, 
or  is  it  opposed  to  such  recognition? 

"An  immediate  reply  will  be  greatly  appreciated." 

We  shall  advise  our  members  as  to  the  reply  of  the  Oil 
Association. 

In  its  present  campaign  the  American  Association  is  in- 
terested in  nothing  more  than  having  the  just  and  reason- 
able demands  of  the  American  Department  of  State  com- 
plied with  before  recognition  is  extended  to  any  govern- 
ment in  Mexico.  We  simply  want  to  see  American  rights 
in  Mexico  restored  and  safeguarded.  The  political  and 
official  leaders  of  both  parties  in  this  country  have  all  agreed 
for  the  past  several  years  upon  the  steps  necessary  to  be 
taken.  It  is  not  that  we  fear  the  authorities  in  Washington 
are  weakening  in  their  stand  for  a  full  and  equitable  settle- 
ment of  the  Mexican  question,  but  we  do  feel  that  the  utter- 
ances of  the  veritable  army  of  propagandists  that  Mexico 
is  employing  to  create  favorable  sentiment  in  this  country, 
often  by  positive  misrepresentation  of  actual  conditions, 
must  not  be  allowed  to  go  unchallenged. 

Likewise,  capitalistic  groups  that  are  making  temporarily 
favorable  contracts  should  be  urged  to  lend  their  support 
and  influence  to  the  general  settlement  of  the  entire  Mex- 
ican question  which  alone  can  bring  permanent  prosperity 
and  security  for  Mexicans  and  foreign  investors  alike.  It 
is  to  this  end  alone  that  we  ask  co-operation  and  assistance 
in  making  known  the  truth  about  Mexico,  namely,  the  adop- 
tion of  the  only  policy  which  will  protect  all  interests,  large 
and  small,  in  that  country. 

6Z 


OBREGON  AND  HIS  PROPAGANDA  FOR 
RECOGNITION 

(BULLETIN  No.  S—Isstted  November  3,  1921) 

Certain  typical  and  related  inquiries  have  reached  the 
American  Association  of  Mexico  in  number  sufficient  to 
warrant  the  deduction  that  the  American  public  is  in  a 
confused  state  of  mind  regarding  Mexico.  Misinformation 
is  combined  with  misinterpretation  of  events.  The  purpose 
of  this  bulletin  is  to  answer  these  questions  and  to  clear 
up  this  confusion.  Here  are  some  of  the  things  which 
prove  puzzling  to  American  small  stockholders  in  mining, 
oil  or  land  companies  in  Mexico;  to  uplift  workers  touched 
by  the  condition  of  the  lower  classes  there,  to  persons  inter- 
ested in  the  missionary  field  or  to  those  who  have  merely 
a  general  interest  in  seeing  a  near  neighbor  to  the  United 
States  and  normally  a  good  customer  get  his  house  in  order : 

Why  does  the  State  Department  withhold  recognition 
despite  Gen.  Obregon's  public  assurances  that  his  govern- 
ment will  give  every  protection  to  American  and  other  for- 
eign interests  and  rights? 

Is  there  a  dangerous  bolshevist  movement  in  Mexico  and 
do  radicals  dominate  the  Obregon  cabinet?  Obregon  denies 
this,  why  not  take  him  at  his  word? 

If  Mexico  is  not  enjoying  internal  peace,  if  foreigners  are 
being  deprived  of  their  rights  and  their  property  confis- 
cated, why  do  American  chambers  of  commerce  and  gov- 
ernors of  border  states,  who  ought  to  know  the  truth,  urge 
immediate  and  unconditional  recognition? 

If  conditions  are  unfavorable  to  Americans  and  American 
enterprises  how  can  the  attitude  of  American  chambers  of 
commerce  in  Mexico  be  explained?  The  Tampico  and  Mex- 
ico City  bodies  stand  behind  the  Obregon  government;  they 
participated  in  invitations  to  American  business  organiza- 
tions to  send  excursions  to  Mexico  and  these  excursionists 
have  returned  with  glowing  reports.  Certainly  American 
business  men  in  Mexico  would  be  frank  and  truthful  with 
their  compatriots. 

These  and  other  questions  of  a  like  nature  indicate  that 
the  average  American  is  perplexed  by  the  contradictory 

64 


news  from  Mexico  and  finds  it  difficult  to  reach  a  definite 
conclusion  as  to  the  truth.  To  those  not  students  of  the 
Mexican  situation,  we  believe  a  somewhat  detailed  consider- 
ation of  Obregon  propaganda  methods  will  prove  enlighten- 
ing. This  bulletin  is  intended  primarily  for  those  interested 
in  Mexico  but  lacking  sources  of  first-hand  information. 

In  considering  Obregon  propaganda  it  must  be  borne  in 
mind  that  Mexican  executives  know  they  stand  or  fall 
on  recognition  by  the  United  States.  First,  a  foreign  loan 
cannot  be  obtained  without  recognition.  An  empty  public 
treasury  is  a  chronic  condition  and  money  is  needed  to  keep 
political  henchmen  satisfied,  particularly  high  army  officials 
for  it  is  among  these  that  successful  revolutions  generally 
start.  Second,  Mexican  presidents  know  that  revolution- 
ists hesitate  to  start  a  revolt  against  a  government  recog- 
nized by  Washington.  For  these  reasons  self-preservation 
and  recognition  become  synonyms  to  Mexican  executives. 

The  Obregon  recognition  campaign  therefore  possesses 
two  features  which  make  for  effectiveness:  Singleness  of 
purpose  and  the  vital  necessity  of  attaining  that  purpose. 
This  explains  why  the  one  sure  method  of  getting  money 
from  a  seemingly  bare  Mexican  treasury  in  the  past  ten 
years  has  been  to  approach  the  ruler  of  the  day  with  a 
scheme  to  obtain  recognition  or  influence  American  public 
opinion  to  that  end.  On  coming  into  power  Obregon  did 
not  find  it  necessary  to  experiment  with  propaganda  meth- 
ods or  personnel.  Carranza's  efficient  machine  was  inherited 
by  de  la  Huerta  and  passed  along  to  Obregon.  Methods  and 
purposes  are  the  same.  But  few  changes  have  been  made 
in  personnel.  Many  individuals,  Americans  unfortunately 
as  well  as  Mexicans,  have  kept  their  names  on  the  govern- 
ment payroll  from  Madero's  time  to  the  present  because 
of  their  ability  as  propagandists.  Clever  propagandists  are 
passed  from  one  administration  to  the  next.  Talent  of  this 
order  is  too  vitally  necessary  to  be  dispensed  with  lightly. 

Despite  these  many  advantages  Obregon  is  confronted  by 
a  formidable  difficulty,  which  embarrassed  his  predecessors 
as  well.  This  difficulty  is  the  fixed  idea  shared  by  almost 
every  Mexican  politician  that  to  appear  to  yield  or  truckle 
to  the  United  States  would  result  in  the  overthrow  of  any 
ruler  who  tried  the  experiment.  To  the  mind  of  the  Mex- 
ican politician  this  means  that  the  president  of  Mexico  must 

65 


carefully  avoid  making  any  sort  of  concession  to  the  United 
States,  no  matter  how  just  the  demand  of  the  Washington 
government.  Thus  Obregon  is  seen  today,  fishing  for  rec- 
ognition with  words  and  promises,  attempting  to  hoodwink 
Washington  into  giving  something  for  nothing  while  pos- 
ing at  home  as  the  champion  of  all  Latin  America  against 
the  "Colossus  of  the  North."  This  was  precisely  the  Car- 
ranza  method  and  Obregon  is  encouraged  by  the  fact  that 
Carranza  was  successful  in  securing  recognition. 

Early  in  the  game  propagandists  discovered  that  facts  as 
to  internal  conditions  in  Mexico  could  be  misrepresented  in 
the  United  States  with  impunity;  furthermore,  that  official 
announcement  of  programs,  never  intended  to  be  put  into 
effect,  to  alleviate  and  improve  the  lot  of  the  Mexican  lower 
classes  has  an  effective  appeal  north  of  the  Rio  Grande, 
being  accepted  at  face  value.  They  have  a  rejoinder  ready 
when  attempts  are  made  to  set  the  American  public  right 
as  to  the  facts.  "Propaganda  of  the  big  American  corpora- 
tions" they  cry;  "Enemies  of  our  government  which  pre- 
vents them  from  looting  the  natural  wealth  of  the  country 
and  exploiting  the  peon  as  they  were  permitted  to  do  in 
the  time  of  the  Dictator  Diaz." 

The  discovery  that  the  American  people  are  ready  to 
believe  virtually  anything  bad  said  about  a  rich  corpora- 
tion has  been  very  useful  to  Mexican  propagandists.  It 
explains  to  a  large  degree  why  there  is  a  shout  of  "oil" 
from  Mexico  every  time  Article  27  of  the  Constitution  is 
under  fire.  The  provisions  of  this  article  affect  virtually 
every  foreign  interest  in  Mexico  and  virtually  every  for- 
eigner doing  business  there,  no  matter  in  what  line,  yet  the 
Obregon  propaganda  organization  has  convinced  a  large  por- 
tion of  the  American  people  that  the  adjustment  of  the  oil 
problem  would  remove  all  objections  on  the  part  of  foreign 
governments  endeavoring  to  protect  the  rights  of  their 
nationals  in  Mexico. 

The  American  belief  in  democracy  and  the  rights  of  the 
masses  is  played  upon  constantly.  Any  Mexican  opposing 
the  methods  of  his  government  is  branded  as  a  conservative 
or  reactionary.  Confiscation  of  rural  estates  has  been  pal- 
liated in  the  United  States  by  alleging  that  the  peons  are 
land  hungry  and  that  Mexico  can  never  return  to  the  path 
of  peace  and  prosperity  until  the  country  is  dotted  with 

66 


small  farms.  Propaganda  of  this  sort  is  being  circulated 
today,  at  a  time  when  most  of  the  reputable  newspapers  in 
Mexico  are  bitterly  condemning  the  agrarian  policy  and 
demonstrating  that  the  mass  of  farm  laborers  are  lacking 
not  only  in  capacity  for  independent  operation  of  farms  but 
in  inclination  to  attempt  it  even  when  supplied  with  tools 
and  work  stock  in  addition  to  land.  These  newspapers 
charge  that  the  system  is  a  vicious  instrument  of  graft  and 
is  destroying  agriculture.  They  point  out  that  within  the 
past  few  years,  the  farm  productivity  of  the  country  has 
been  so  lowered  as  a  result  of  the  agrarian  policy  that  Mex- 
ico will  have  to  import  more  corn  this  year  than  ever  before 
to  prevent  the  people  from  starving.  Yet  the  Obregon  gov- 
ernment is  bringing  in  corn,  announcing  that  it  is  being  sold 
to  the  people  at  cost  and  praising  itself  for  its  action,  with- 
out assuming  any  of  the  discredit  for  producing  the  condi- 
tions which  made  this  necessary. 

Believing  Americans  to  be  materialists  and  mere  dollar 
worshipers,  the  propagandists  regard  the  appeal  to  the  busi- 
ness side  of  the  American  as  perhaps  the  strongest  weapon 
in  their  armory.  Articles  are  published  regarding  the  inex- 
haustible wealth  and  resources  of  Mexico  and  foreign  cap- 
ital is  invited  to  come  in  and  aid  in  development.  Mer- 
chants and  manufacturers  are  told  of  the  vast  trade  await- 
ing them,  once  recognition  is  accorded.  Trade  excursions 
from  the  United  States  are  encouraged  by  free  transporta- 
tion over  Mexican  railroads  and  visitors  are  entertained 
lavishly  at  government  expense.  Experience  has  demon- 
strated that  such  visitors  learn  nothing  of  real  conditions, 
forget  business  and  thoroughly  enjoy  themselves  in  a  coun- 
try which  has  no  Volstead  law,  and  repay  generous  hospi- 
tality by  returning  to  the  United  States  and  supporting 
recognition  of  Obregon.  Having  seen  only  the  bright  side 
of  things  in  Mexico,  they  are  sincere  more  often  than  not 
in  their  glowing  pictures  of  conditions. 

These  are  a  few  of  the  general  methods  employed  by  the 
Obregon  propagandists.  A  more  potent  factor  comes  into 
play  when  the  attitude  of  American  organizations  in  Mex- 
ico and  certain  individual  Americans  resident  there  comes 
up  for  consideration.  This  factor  is  the  power  of  the  Mex- 
ican president  to  make  or  break  any  foreigner  doing  busi- 
ness in  the  country.    Favors  he  may  dispense  with  a  lavish 

67 


hand;  his  power  to  do  harm  is  virtually  unlimited.  Under 
Article  33  of  the  Constitution  he  may  expel  from  Mexico 
any  foreigner  whose  presence  he  may  deem  inexpedient  and 
is  not  even  required  to  show  cause.  No  legal  recourse  is 
allowed  the  victim;  he  is  specifically  denied  the  right  to  a 
day  in  court.  Moreover,  under  a  resolution  of  congress, 
Obregon  enjoys  extraordinary  powers  in  the  treasury 
department.  This  means  that  he  is  invested  with  the  tax- 
making  powers  of  congress  and  by  executive  decree  may 
impose  or  remove  federal  taxes.  The  following  extract  from 
an  article  published  by  El  Universal,  a  leading  Mexico  City 
newspaper,  on  October  2,  1921,  serves  as  a  timely  illus- 
tration : 

"In  view  of  the  fact  that  there  is  no  proportion  be- 
tween the  taxes  paid  by  large  and  small  rural  proper- 
ties in  Mexico,  the  Ministry  of  Agriculture  is  consid- 
ering the  advisability  of  readjusting  taxation.  It  is  a 
fact  that  small  properties  pay  as  high  as  5  to  12  per 
thousand  while  large  properties  pay  barely  2  per 
thousand.  EACH  LARGE  PROPERTY  WILL  BE 
TAKEN  INTO  CONSIDERATION  SEPARATELY  and 
it  has  been  decided  to  begin  with  the  properties  of 
Gen.  Terrazas.  Next  in  turn  will  be  the  properties  of 
the  Palomas  Ranch  and  Cattle  Company." 

Correspondents  of  American  newspapers  resident  in  Mex- 
ico City  know  that  under  Article  33  they  may  be  expelled 
from  the  country  at  the  whim  of  the  president ;  they  know 
that  without  access  to  official  sources  of  information  their 
services  are  valueless  to  their  papers.  They  can  not  afford 
to  offend  the  governing  powers  and  must  exercise  great  care 
in  what  they  cable,  confining  themselves  largely  to  bare 
reports  of  happenings.  They  are  inhibited  from  indulging 
in  that  frank  and  open  comment  and  interpretation  of  the 
news  which  would  give  a  real  picture  of  the  Mexican  situa- 
tion. They  remember  cases  of  other  correspondents  ex- 
pelled from  the  country  and  are  taking  no  chances  and  will 
take  none  until  a  story  comes  along  big  enough  to  warrant 
the  risk  of  being  sent  out  of  the  country.  This  gives  the 
Obregon  propagandists  free  rein  to  distort  facts  in  order 
to  create  a  favorable  impression  in  the  United  States. 

Representatives  of  Adolfo  de  la  Huerta,   president  ad 

68 


interim  of  Mexico  after  the  murder  of  Carranza,  were  ex- 
ceedingly active  at  Washington  during  the  months  imme- 
diately preceding  Gen.  Obregon's  induction  into  office  last 
December.  It  was  known  in  Washington  at  the  time  that 
the  Mexican  agents  showed  great  interest  in  immediate 
recognition  and  were  apathetic  to  suggestions  that  action 
might  come  after  Obregon's  inauguration.  It  was  openly 
charged  that  if  the  ad  interim  government  secured  recog- 
nition it  would  endeavor  to  remain  in  power  despite  Obre- 
gon.  If  such  hopes  existed,  they  were  dispelled  by  the 
note  of  Secretary  of  State  Colby  delivered  to  Roberto  Pas- 
queira,  official  representative  of  de  la  Huerta.  Mr.  Colby 
said  in  substance:  Our  conversations  indicate  substantial 
agreement  on  pending  questions,  the  time  has  come  to  re- 
duce that  understanding  to  a  solemn  written  compact  bind- 
ing on  the  two  nations.  An  abrupt  termination  of  negotia- 
tions was  the  result. 

This  incident  serves  to  throw  light  on  the  present  attitude 
of  the  State  Department  with  regard  to  assurances  from 
Obregon  agents  and  to  the  published  statements  of  Presi- 
dent Obregon.  Mr.  Colby  was  serving  a  Democratic  admin- 
istration which  had  shown  itself  most  friendly  to  the  revo- 
lutionary element  represented  first  by  Carranza,  later  by 
de  la  Huerta  and  now  by  Obregon.  For  nearly  eight  years 
that  administration  had  been  dealing  with  Carranza  and 
representatives  of  his  movement;  recognition  had  been  ac- 
corded Carranza  after  he  had  made  solemn  promises  which 
never  were  fulfilled;  the  State  Department  had  learned  a 
bitter  lesson  and  was  fighting  shy  of  trading  "sight  unseen" 
with  Mexican  executives  springing  from  Mexican  revolu- 
tions. The  present  officials  of  the  State  Department  are 
profiting  by  that  experience  in  insisting  on  written  guar- 
antees. 

In  the  New  York  Times  of  July  3,  1921,  "A  Diplomatic 
Correspondent"  pointed  out  that,  in  a  letter  to  Mr.  Colby 
given  to  the  press  October  30,  1920,  Mr.  Pesqueira  proifered 
three  of  the  essentials  which,  Secretary  Hughes  insists, 
Mexico  must  embody  into  a  treaty.  The  Pesqueira  letter 
contained  a  disavowal  of  the  retroactivity  of  Article  27,  a 
pledge  that  Mexico  would  assume  full  responsibility  for  all 
her  international  obligations  and  a  proposal  of  an  Inter- 
national Claims  Commission  to  adjust  and  settle  the  claims 

69 


of  all  foreigners  for  damages  arising  out  of  the  revolution. 
Pesqueira  was  recalled  and  did  not  return  to  Washington. 
Meantime  other  methods  were  resorted  to  in  the  campaign 
for  recognition. 

Opportunity  for  propaganda  in  connection  with  the  Obre- 
gon  inaugural  ceremonies  was  not  overlooked.  The  occasion 
therefore,  offered  the  unusual  spectacle  of  governors  of 
states  of  the  United  States  participating  as  guests  of  honor 
at  an  official  ceremony  of  a  government  not  recognized  by 
our  own.  These  governors  with  staffs  and  civilian  entour- 
age had  gone  to  Mexico  as  guests  of  the  Mexican  govern- 
ment. They  were  royally  entertained,  free  trains  and  free 
entertainment  being  at  their  disposal.  American  cities  also 
sent  trade  excursions.  Effusive  speeches  on  the  part  of 
hosts  and  guests  marked  the  occasion  but  nothing  was  said 
of  the  rights  of  Americans  in  Mexico.  It  was  subsequent 
to  this  junket  that  legislatures  began  to  pass  resolutions 
asking  our  government  to  recognize  Obregon,  and  American 
business  men,  who  had  participated,  began  to  secure  action 
from  their  local  chambers  of  commerce  to  the  same  end. 
The  governor  of  Texas,  if  accurately  quoted  by  La  Prensa, 
of  San  Antonio,  stated  that  the  Obregon  government  had 
been  recognized  by  Texas  if  not  by  the  United  States.  Two 
governors  of  states,  whose  terms  recently  expired,  are  now 
spending  much  of  their  time  in  Mexico  City,  looking  for 
business  connections. 

The  next  step  in  the  propaganda  campaign  was  an  appeal 
to  the  American  business  man.  In  the  spring  of  this  year 
W.  F.  Saunders,  secretary  and  publicity  man  for  the  Amer- 
ican Chamber  of  Commerce  in  Mexico  City,  made  an  ex- 
tended trip  in  the  United  States,  visiting  chambers  of  com- 
merce and  laboring  to  create  sentiment  in  favor  of  the 
Obregon  government.  In  a  speech  at  Philadelphia  he  said 
Mexico  was  rapidly  getting  back  to  normal,  that  Americans 
in  Mexico  had  no  grounds  for  complaint  and  predicted  a 
tremendous  trade  boom  the  moment  full  diplomatic  rela- 
tions were  resumed  between  the  two  countries.  His  work 
was  unmistakable  recognition  propaganda.  Whether  the 
American  Chamber  of  Commerce  in  Mexico  was  reimbursed 
by  the  Obregon  government  for  the  expenses  of  this  repre- 
sentative, we  are  not  informed. 

Later  an  ingenious  scheme  was  devised  in  sending  the 

70 


so-called  Good  Will  Commission  to  the  United  States  for 
the  ostensible  purpose  of  inviting  American  business  men 
and  chambers  of  commerce  to  an  International  Trade  Con- 
ference to  be  held  in  Mexico  City  in  June,  1921.  The  Com- 
mission represented  the  Confederated  Chambers  of  Com- 
merce of  Mexico,  which  numbered  amonjj  its  members  or- 
ganizations in  Mexico  made  up  of  European  business  men 
such  as  the  French,  Italian  and  Spanish  Chambers  of  Com- 
merce. The  Commission,  specifically  disclaiming  a  political 
purpose,  talked  trade  with  Mexico.  Suspicion  as  to  the 
real  object  of  the  Commission  was  aroused  as  no  reasonable 
explanation  could  be  oifered  as  to  why  Europeans  should 
be  assisting  in  financing  an  enterprise  intended  to  promote 
trade  between  the  United  States  and  Mexico.  In  view  of 
this,  the  American  Association  of  Mexico  sent  a  telegram 
of  inquiry  on  April  4,  1921,  directed  to  the  president  of  the 
American  Chamber  of  Commerce  in  Mexico  City,  which  is 
copied  herewith.  The  reply  of  the  president  has  been  placed 
in  parenthesis  after  each  question. 

"In  the  opinion  of  the  American  Association  of  Mex- 
ico the  object  and  effect  of  the  tour  of  the  so-called 
'Good  Will  Commission'  are  political  and  not  commer- 
cial. We  have  undertaken  so  to  advise  commercial 
bodies  in  this  country.  The  Department  of  State  and 
the  Chamber  of  Commerce  of  the  United  States  deny 
the  report  that  they  have  sponsored  or  endorsed  this 
tour.  We  should  now  like  to  know  whether  it  has  the 
endorsement  of  your  American  Chamber  of  Commerce 
and  what  i-esponsibility  that  Chamber  assumes.  Kindly 
wire  reply  at  your  earliest  convenience. 

"First.  Are  Bruno  Newman  and  W.  E.  Vail  repre- 
senting the  American  Chamber  of  Commerce?  (Bruno 
Newman  does  represent  this  Chamber.  William  Vail 
is  director  of  service  of  this  American  Chamber.  He 
is  a  guest  on  this  trip  of  the  Confederacion  de  Camaras 
de  Comercio  de  los  Estados  Unidos  Mexicanos.) 

"Second.  Are  they  both  American  citizens?  (Both 
are  registered  at  American  Consulate  as  American  citi- 
zens.) 

"Third.  How  much  is  your  Chamber  contributing 
to  the  trip?  (American  Chamber  contributes  nothing 
to  the  trip.) 

71 


"Fourth.    Are  the  Associated  Chambers   of  Com- 
merce paying  the  entire  cost  of  the  trip?     (Under- 
stand Confederation  directly  paying  cost  of  trip.) 
"Fifth.     If  not,  who  is? 

"Sixth.  Is  the  American  Chamber  paying  for  the 
car  on  which  ^he  delegates  are  traveling  ?  If  not,  who 
is?  (Have  no  knowledge  who  is  paying  for  car. 
American  Chamber  pays  nothing.) 

"Seventh.  Is  the  Mexican  government  contributing 
to  this  trip,  and  if  so,  how  much  ?  (Understand  unoffi- 
cially that  Mexican  government  is  making  an  allowance 
to  Confederacion  de  Camaras  account  cost  this  trip.) 

"Eighth.    Have  not  Vail  and  Newman  a  concession 
or  contract  with  the  Mexican  government  under  which 
they  enjoy  privileges  and  derive  profits  in  conducting 
such  excursions  as  they  are  attempting  to  organize  in 
this  country?     (Understand  Vail  and  Newman  have  a 
contract  with  the  Mexican  government  by  which  they 
get  special  rates  for  excursion  parties.) 
These  facts  would  seem  to  demonstrate  a  willingness  on 
the  part  of  the  American  Chamber  of  Commerce,  or  at  least 
the  dominating  figures  who  control  it,  to  lend  the  name  and 
support  of  the  chamber  to  an  excursion  which  was  clearly 
intended  as  part  of  Obregon's  propaganda  campaign  to 
secure  recognition.    The  president  of  the  American  Cham- 
ber admits  he  knew  enough  "unofficially"  to  have  warranted 
an  investigation  in  order  to  obtain  official  information  for 
an  official  report  to  the  board  or  to  a  general  meeting,  had 
he  felt  that  there  would  have  been  real  opposition  by  the 
leaders  of  the  chamber  to  participation  in  the  government's 
propaganda. 

The  directing  powers  of  the  American  Chamber  of  Com- 
merce knew,  or  should  have  known,  that  the  chamber's  en- 
dorsement of  this  so-called  trade  excursion  could  have  but 
one  possible  interpretation  in  the  United  States,  namely, 
that  the  American  colony  of  Mexico  believed  that  the  Obre- 
gon  government  was  such  as  to  give  Americans  in  Mexico 
protection  in  their  rights  and  that  normal  conditions  were 
restored  to  the  point  where  it  seemed  proper  for  an  Amer- 
ican trade  organization  in  Mexico  to  encourage  Ameri- 
cans to  enter  the  Mexican  field  again  and  invest  their 
money  in  developing  trade  with  Mexico.    These  ruling  pow- 

n 


ers  knew,  or  should  have  known,  that  with  Obregon  and  his 
following  in  the  saddle,  the  Carranza  faction  was  being  con- 
tinued in  power  and  that  this  faction  had  never  shown  the 
slightest  concern  for  the  commerce  of  Mexico  as  such,  or 
for  the  rights  of  foreign  investors.  They  knew  that  the 
confiscatory  Constitution  of  1917  was  in  force  and  were 
acquainted  with  the  burdens  and  disabilities  imposed  upon 
foreign  investors  by  this  charter.  They  knew  that  the 
Wilson  administration  was  unpopular  with  Americans  in 
Mexico  who  felt  that  their  own  government  had  refused 
them  protection  and  abandoned  them ;  they  knew  that  high 
hopes  were  entertained  that,  with  the  incoming  adminis- 
tration at  Washington,  American  rights  in  Mexico  would 
be  protected.  An  intimate  acquaintance  with  the  sentiment 
of  Americans  in  Mexico  warrants  the  statement  that  the 
American  Chamber  of  Commerce's  participation  in  this 
trade  excursion  was  not  popular  with  the  American  colony 
in  Mexico  because  the  real  purpose  was  understood.  In 
the  face  of  all  these  facts,  it  would  be  interesting  to  know 
what  influences  were  at  work  to  secure  endorsement  and 
participation  of  the  Chamber  in  the  junket,  and  whether  a 
majority  of  the  Chamber  itself  approved  it.  The  allegation 
that  some  members  of  the  board,  lacking  in  broad  perspec- 
tive, misread  the  obvious  facts  in  the  situation,  may  be 
offered  in  palliation  but  it  does  not  explain. 

The  International  Trade  Conference  proved  a  false  alarm 
from  a  commercial  standpoint.  American  delegates  had 
their  eyes  opened  when  a  Cuban  delegate  presented  a  reso- 
lution calling  upon  the  American  government  to  recognize 
Obregon.  They  were  surprised  at  this  political  move,  when 
the  Good  Will  Commission  had  given  assurances  that  there 
was  nothing  political  in  the  conference,  in  extending  invi- 
tations to  Americans  to  participate.  Many  declared  that 
they  had  no  authority  from  their  commercial  bodies  to  vote 
on  such  a  question  and,  after  something  of  a  tempest  in  a 
teai'ot,  the  resolution  was  withdrawn.  Excelsior,  a  Mexico 
City  newspaper  of  high  standing,  reviewing  the  conference 
after  its  close,  said  the  program  lacked  topics  of  interna- 
tional commercial  interest  and  that  American  merchants 
and  business  men,  who  had  attended  for  the  honest  purpose 
of  assisting  in  developing  methods  of  trade  between  Mexico 

73 


and  the  United  States,  had  been  grossly  deceived  and  had 
wasted  their  time. 

Not  all  the  American  delegates  seem  to  have  been  taken 
unawares  when  the  political  purpose  of  the  conference  devel- 
oped. The  delegate  from  the  San  Antonio,  Texas,  Chamber 
of  Commerce  made  an  impassioned  plea  for  recognition,  and 
criticized  American  excursionists  for  accepting  free  trans- 
portation and  other  gratuities  from  a  bankrupt  Mexican 
government.  The  American  Association  heartily  endorses 
the  latter  statement  and  feels  it  would  be  more  just  for 
the  Mexican  government  to  pay  its  school  teachers  and 
employees  than  to  squander  large  sums  in  futile  trade  excur- 
sions and  conferences. 

If  further  proof  be  needed  that  there  was  an  ulterior 
motive  in  having  American  politicians  attend  the  inaugural 
ceremonies,  in  the  Good  Will  Commission  junket  and  in  the 
Trade  Conference,  it  is  furnished  by  Gen.  Obregon  himself 
in  his  signed  statement  in  the  New  York  World  dated  Mex- 
ico City,  June  26,  1921.  Herewith  are  given  the  first  and 
part  of  the  second  paragraph  of  this  lengthy  statement: 

"The  States  of  Texas,  New  Mexico,  California  and  Ari- 
zona, acting  independently  and  without  the  slightest  inspira- 
tion, have  made  official  requests  upon  Washington  for  re- 
sumption of  the  formal  relations  that  will  permit  proper 
and  complete  expression  of  friendship  between  Mexico  and 
the  United  States.  The  action  of  these  states,  so  intimately 
in  contact  with  my  country,  tells  its  own  story  of  peace  and 
c  rder  along  the  border  at  this  moment  of  writing. 

"The  First  International  Commercial  Congress  is  holding 
its  sessions  in  the  City  of  Mexico,  many  delegates  being  in 
attendance  from  the  United  States.  These  men,  returning 
to  their  homes,  will  be  compelled  to  report  the  reign  of  ^aw 
in  every  one  of  the  twenty-seven  states  that  compose  the 
Mexican  Union." 

What  would  "compel"  this  report  on  the  part  of  the  dele- 
gates? Certainly  not  first  hand  information  regarding 
'every  state  of  Mexico ;  certainly  not  a  review  of  the  Mexican 
press  for  the  period  immediately  preceding  the  congress; 
certainly  not  a  reading  of  the  daily  press  of  Mexico  City 
during  the  period  the  congress  was  in  session.  The  slaugh- 
tei*  of  Catholics  by  radical  official  elements  during  street 
fighting  in  Morelia,  Michoacan,  the  invasion  of  the  Chamber 

74 


of  Deputies  by  a  bolshevist  labor  group,  the  abortive  revo- 
lution in  Oaxaca  and  the  application  of  the  notorious  ley 
fuga  to  one  of  its  leaders,  newspaper  articles  on  the  graft 
running  riot  on  the  nationally  operated  railroads  and  the 
corruption  among  customs  officials  at  Veracruz  where  a 
freight  congestion  of  many  months  standing  was  bringing 
merchants  in  all  parts  of  the  country  to  the  verge  of  finan- 
cial ruin,  these  and  similar  incidents  were  too  recent  to 
have  escaped  the  attention  of  any  delegate  who  made  even 
the  most  casual  investigation  into  the  real  internal  condi- 
tions in  Mexico.  The  only  compelling  force  which  possibly 
can  be  suggested  is  the  law  of  courtesy  which  impels  a 
guest  to  refrain  from  criticizing  his  host. 

Upon  returning  from  their  tour  of  the  United  States,  the 
representatives  of  the  American  Chamber  of  Commerce 
undertook  the  promotion  of  a  lottery  in  the  name  of  the 
American  charities  of  Mexico  City.  We  understand  that 
the  plan  was  repudiated  by  various  American  organizations, 
some  of  which  would  have  been  beneficiaries.  We  are  in- 
formed that  certain  of  the  promoters,  formerly  high  in  the 
councils  of  the  American  Chamber  of  Commerce,  are  no 
longer  members  of  that  body.  This  Association  is  firmly 
convinced  that  infinitely  greater  harm  to  Americans  resi- 
dent in  Mexico  and  to  American  interests  was  done  by  the 
Good  Will  excursion  than  possibly  could  have  resulted  from 
any  purely  local  enterprise,  in  Mexico  City  and  environs, 
however  reprehensible  its  opponents  might  consider  it,  and 
that  the  directors  of  the  American  Chamber  of  Commerce 
in  endorsing  the  Good  Will  Commission  assumed  a  much 
graver  responsibility  than  would  have  been  the  case  had 
they  tacitly  approved  the  lottery. 

Recently  the  Mexico  Country  Club,  of  Mexico  Citv,  com- 
posed largely  of  Americans,  received  40,000  pesos  from  the 
Obregon  government  in  settlement  of  c'aims  for  damages 
done  the  club's  property  during  1916.  These  damages  were 
inflicted,  not  by  the  revolutionary  faction  which  the  present 
government  represents,  but  by  the  Zapatistas,  with  whom 
Obregon  and  his  followers  were  at  war.  Among  hundreds 
of  Americans  claims,  this  is  one  of  the  two  or  three  to  be 
adjusted.  The  motive  behind  the  government's  action  may 
have  been  merely  the  justice  of  the  claims.  However,  it 
was  the  sort  of  thing  which  every  American  excursionist 

75 


to  Mexico  City  would  hear  about,  and  precisely  the  sort  of 
news  which  Obregon  would  wish  excursionists  to  carry 
back  to  the  United  States.  Furthermore,  it  was  not  con- 
ducive to  making  club  members  particularly  hostile  to  the 
Obregon  administration. 

The  latest  move  in  the  Obregon  propaganda  campaign 
was  the  centennial  celebration  at  Mexico  City,  commemorat- 
ing the  date  of  Mexico's  independence  from  Spain.  Page 
advertisements  were  inserted  in  American  newspapers  re- 
garding the  International  Commercial  Exposition  in  con- 
nection with  the  centennial.  Again  the  old  trade  camou- 
».ij^  flage — again  the  call  of  the  dollar.  A  single  quotation  will 
be  sufficient  to  show  the  character  of  this  advertising : 

"This  great  exposition  during  the  centennial  festivi- 
ties will  be  held  in  the  National  Legislative  Palace, 
Mexico's  $5,000,000  wonder  building,  occupying  two 
city  blocks,  and  the  largest  building  in  Latin  America. 
Nearly  three  million  business  men  will  surge  to  Mexico 
City  during  the  centennial  festivities  to  discuss  with 
their  compatriots  their  part  in  the  building  of  a  new 
Mexico." 

To  persons  acquainted  with  Mexico  this  sort  of  stuff  is 
mere  rot — not  even  an  intelligent  lie.  The  average  of  one 
business  man  to  every  five  inhabitants  is  a  fantastically 
impossible  ratio  and  of  Mexico's  fifteen  million  inhabitants, 
largely  engaged  in  agriculture,  just  about  three  millions  are 
able  to  read  and  write  and  the  cultured  Mexican  turns  nat- 
urally to  literature  or  to  the  professions  rather  than  to 
business.  Mexico's  wonder  building  is  the  steel  skeleton  of 
a  structure  started  by  Porfirio  Diaz,  a  grim  rusting  reminder 
of  the  days  when  the  public  money  went,  in  part  at  least, 
into  public  improvements.  With  temporary  roofing  and 
temporary  floors  it  doubtless  made  an  excellent  exposition 
"palace." 

Excelsior,  in  an  editorial  published  September  19,  1921, 
refers  to  the  scenes  of  animation  in  connection  with  the 
centennial,  "the  city  refurbished  and  hastily  decorated, 
defects  hidden,  blemishes  concealed,  the  skeletons  of  build- 
.  ings  of  another  era  covered  or  partly  covered  but  skeletons 
still,"  and  explains  that  this  was  done  "with  the  clearly 
manifest  intention  of  creating  a  favorable  impression  upon 

76 


our  guests,  the  representatives  of  foreign  nations."  The 
editorial  continues: 

"The  impossible  has  been  accomplished  in  order  to  im- 
press upon  our  guests  that  Mexico  is  in  the  midst  of  a 
period  of  abundance  and  fruitful  progress,  in  the  full  enjoy- 
ment of  prosperity  and  development,  without  difficulties 
and  without  problems.  But  how  different  if  our  guests 
could  look  beneath  the  surface  and  see  things,  which  though 
concealed,  vitally  affect  Mexico. 

"Our  guests  do  not  see  or  do  not  care  to  see  that  back  of 
these  festivities  is  a  country  which  is  going  to  harvest  a 
crop  insufficient  for  its  needs;  that  famine  impends  and, 
with  no  savings  in  the  public  treasury  as  in  times  past,  we 
are  unprepared  for  evil  days.  They  do  not  see  that  under 
the  name  of  'agrarian  program'  a  series  of  confiscations 
and  offenses  against  private  property  have  been  committed 
which  keep  the  farmers  in  a  state  of  natural  anxiety.  They 
do  not  see  that  the  destruction  of  credit,  so  essential  to 
modern  society,  has  left  the  farmer  and  manufacturer  with- 
out resources.  They  do  not  see  that  traffic  delays  prevent 
the  free  an^  easy  distribution  of  merchandise  and  result 
in  higher  prices.  They  do  not  see  that  prices  have  not 
dropped  from  wartime  levels  as  in  other  countries;  that 
there  has  been  no  readjustment  in  Mexico  and  that  the 
economic  crisis  continues  acute.  They  do  not  see  that  each 
day  brings  a  new  conflict  in  some  state  government;  that 
each  day  some  bolshevist  or  semi-bolshevist  legislation  is 
enacted  against  capital  and  industry.  They  do  not  see  that 
the  states  of  Yucatan  and  Morelos,  whose  prosperity  was 
proverbial  in  other  times,  are  in  wretchedness  and  ruin, 
without  hope  for  reconstruction.  They  do  not  see  that  at 
these  centennial  festivities  there  are,  in  addition  to  the  for- 
eigners, other  guests  imploring  pity  with  hands  outstretched 
in  a  gesture  of  despair." 

Felix  F.  Palavicini,  editor  and  owner  of  El  Universal,  of 
Mexico  City,  in  a  signed  editorial  published  October  19,  1921, 
says: 

"The  Foreign  Relations  department  has  failed  yet  every 
one  knows  how  serious  a  thing  it  is  for  Mexico  to  be  lack- 
ing the  friendship  of  the  United  States,  England  and 
France,  and  our  foreign  policy  consists  of  nothing  more 
than  good  administration  at  home;  that  is,  vigilance  over 

77 


and  protection  for  foreign  capital  invested  in  Mexico.  The 
government's  agrarian  policy  has  resulted  in  a  scarcity  of 
the  prime  necessities  of  life.  The  right  of  property  has 
disappeared  in  Mexico,  and  there  is  no  agricultural  credit. 
If  there  is  no  guarantee  for  the  possession  of  land,  what 
hope  is  there  for  any  citizen  of  fair  legislation  and  justice? 
If  this  is  a  communist  state,  then  we  should  amend  our 
laws  to  conform.  The  Department  of  Agriculture  is  Mex- 
ico's greatest  deterrent  to  amicable  foreign  relations,  and 
the  Department  of  Industry  is  of  the  same  type." 

These  quotations  are  from  the  two  leading  newspapers 
of  Mexico.  Palavicini  was  a  supporter  of  the  revolution 
from  the  beginning,  a  member  of  one  of  the  early  Carranza 
cabinets  and  a  delegate  to  the  convention  at  Queretaro 
which  framed  the  radical  Constitution  of  1917. 

Optimistic  statements  from  officials  of  the  Mexican  gov- 
ernment and  pronouncements  that,  foreign  interests  in  Mex- 
ico receive  full  protection,  the  enthusiastic  published  inter- 
views of  returned  excursionists  about  the  wonders  and  the 
prosperity  and  peace  of  Mexico  should  be  paralleled  with 
the  editorials  of  these  representative  Mexican  newspapers, 
and  then  perhaps  the  American  public  will  begin  to  see  the 
light.  Confusion  of  public  opinion  in  this  country  with 
regard  to  Mexico  exists  because  Obregon  propaganda  pur- 
posely creates  confusion  by  misrepresentation  of  the  facts 
in  order  to  obtain  recognition  without  giving  anything  in 
return. 


78 


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